The current-year earnings estimates for Yelp have been revising upward. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements. The company's sales are expected to grow 9.6% this year versus the industry average of 0%.īeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. And Yelp looks attractive from a sales growth perspective as well. In addition to efficiency in generating sales, sales growth plays an important role. Comparing this to the industry average of 0.73, it can be said that the company is more efficient. Right now, Yelp has an S/TA ratio of 1.2, which means that the company gets $1.2 in sales for each dollar in assets. This metric shows how efficiently a firm is utilizing its assets to generate sales. The company's EPS is expected to grow 124% this year, crushing the industry average, which calls for EPS growth of 24.8%.Īsset utilization ratio - also known as sales-to-total-assets (S/TA) ratio - is often overlooked by investors, but it is an important indicator in growth investing. While the historical EPS growth rate for Yelp is 18%, investors should actually focus on the projected growth. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration. While there are numerous reasons why the stock of this online business reviews company is a great growth pick right now, we have highlighted three of the most important factors below:Įarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better. Research shows that stocks carrying the best growth features consistently beat the market. In addition to a favorable Growth Score, it carries a top Zacks Rank.
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Yelp ( YELP Quick Quote YELP - Free Report) is on the list of such stocks currently recommended by our proprietary system. However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. But finding a great growth stock is not easy at all.īy their very nature, these stocks carry above-average risk and volatility. Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns.
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