Yelp Inc YELP 27.66% plunged more than 25 percent following the company reported its second one-fourth results that included a full year fiscal 2015 guidance coming in below objectives. Jason Helfstein of Oppenheimer commented in an email that Yelp’s revised guidance reflects “difficulty” in hiring new salespeople, sales efficiency, and the discontinuation of brand advertising, all triggered by competition from programmatic ad platforms.
Helfstein added the company’s guidance suggests a “reduced salesforce productivity” from plus 12 percent year-over-year in the first half of 2015 to plus 5 percent in the bottom half. 10 million 25 % in underneath half of the entire year to drive consumer engagement adds risks to the company’s long-term margins.
Bottom line Helfstein stated that he thinks in the fundamental value of Yelp’s reviews to consumers. However, until the company can show S&M leverage in its results, traders will suppose 20 percent terminal margins, from a prior 40 percent down. In fact, the analyst’s previous bullish thesis was based on Yelp’s ability to keep hiring more local sales people and the company’s target of 30 percent growth in hiring is below his 35 percent expectations. The important thing Yelp’s reduction of its brand advertising will be a headwind to EBITDA margins as the company’s struggles to fill its salesforce creates a “structural challenge” to its long-term sales team productivity.
Josey continued that investors should move to the sidelines before the company can show enhancing trends in overall traffic and engagement as well as stabilization across its core local advertising business. The analyst observed that the number of companies with the scale, brand, and network effect to capitalize in the neighborhood online advertisement market is “limited” and Yelp positioning helps it is a “prime beneficiary” as an operator and acquisition target. Commenting on Yelp’s decision to remove its brand advertising section will lead to a near-term strike to its top collection and profitability, however the decision could actually enhance consumer engagement and the company’s value proposition on the medium and long-term.
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Bob Peck of SunTrust Robinson Humphrey commented in a note that perhaps Yelp’s risk-to-reward profile is currently “more favorable” with forecasts being “slashed” which allows a better setup to meet or defeat continue. 35 million run-rate business growing higher than 70 percent. Analysts at Raymond James downgraded shares to advertise Perform from Outperform. Benzinga does not provide investment advice.
September 15 – Bloomberg: “China removed quotas for companies to improve funds in the abroad bond and loan marketplaces, as it tries to staunch capital outflows spurred by a currency devaluation. September 14 – Bloomberg (Amy Li and Helen Yuan): “Chinese brokerages ruing the collapse of futures trading in Shanghai are pitching clients similar agreements in Singapore. ‘Goodbye, China Financial Futures Exchange; Hello, FTSE A50! What messaging service, discussing Singapore-traded futures on an index of the biggest mainland companies. China’s local collateral futures market positioned as the world’s busiest as lately as July, has seen quantities plunge 99% since June as policy manufacturers curbed leverage and position sizes and announced investigations into ‘destructive’ short retailers.
That’s still left brokerages, which boosted personnel numbers by 50% since 2011, embracing promoting contracts on the SGX FTSE China A50 Index as a substitute. ‘Investors and hedge funds are showing great interest switching to overseas markets,’ Zhu Bin, deputy general supervisor of… Nanhua Futures Co. said. 113.69bn) of foreign exchange in August, by far the biggest on record, highlighting how capital outflows intensified in the wake of the Yuan’s devaluation last month.
157 million) of 5.65% 2017 notes if an area court accepts the creditor’s restructuring program before that date… China National Erzhong… issued the five-year securities in 2012 at par and the debentures are currently trading at 67.72% of that. September 16 – Bloomberg (Lisa Abramowicz): “Sprint Corp. 1.3 trillion junk-bond market as long as they steer clear of energy debts.