Why Yelp (YELP) Stock Is Nosediving

What Happened:

Shares of local business platform Yelp (NYSE:YELP) fell 7.6% in the morning session after the company reported first quarter earnings results. Yelp's revenue growth regrettably slowed and its revenue missed Wall Street's estimates. The company observed "a challenging environment for the restaurant, retail and other categories" partly offset by outperformance in the home services segment ( +15% year-over-year). On the other hand, adjusted EBITDA came in ahead. Overall, this was a mixed quarter for Yelp.

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What is the market telling us:

Yelp's shares are not very volatile than the market average and over the last year have had only 4 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Yelp is down 18.1% since the beginning of the year, and at $37.99 per share it is trading 21.6% below its 52-week high of $48.43 from December 2023. Investors who bought $1,000 worth of Yelp's shares 5 years ago would now be looking at an investment worth $1,116.

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