Core Insights - The Zacks Internet - Content industry is experiencing growth due to strong demand for digital offerings, video content, and cloud-based applications, aided by advancements in AI and Generative AI [1][3] - Despite growth opportunities, the industry faces challenges from macroeconomic conditions affecting advertising spending, which is a primary revenue source [1][4] Industry Description - The industry includes providers of video encoding platforms, Internet content, staffing services, and online travel companies, among others, and is undergoing rapid digitalization [2] - Advertising remains a major revenue source, prompting companies to enhance their digital presence across various platforms [2] Trends - There is a growing demand for digital offerings driven by technological advancements and the proliferation of smart devices [3] - The industry is characterized by frequent product introductions and evolving consumer behavior [3] Advertising and Revenue - Marketing efforts are focused on increasing website traffic, with advertising and subscriptions being key revenue sources [4] - Consumer spending trends, particularly during holidays, significantly influence revenue, although macroeconomic challenges are expected to impact ad spending in the near term [4] Regulatory Environment - Increased regulatory pressures, especially in China and the EU, are affecting industry participants, particularly regarding advertising practices [5] - The implementation of the General Data Protection Regulation and the Digital Markets Act in the EU adds to the challenges faced by online content providers [5] Industry Ranking - The Zacks Internet - Content industry holds a Zacks Industry Rank of 55, placing it in the top 23% of over 250 Zacks industries, indicating a generally positive outlook [6] - However, the near-term prospects are considered dim, with the industry underperforming compared to the broader market [7][10] Earnings Outlook - Analysts show optimism regarding the industry's earnings growth potential, with a 4.1% increase in the Zacks Consensus Estimate for 2026 earnings since November 30, 2025 [8] Stock Performance - The industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector over the past year, with a decline of 40.3% compared to the S&P 500's increase of 16.8% [10] Valuation - The industry is currently trading at a trailing 12-month price-to-sales ratio of 3.66X, lower than the S&P 500's 6.61X and the sector's 8.32X [13] Company Highlights - **RELX**: A Zacks Rank 1 (Strong Buy) company benefiting from a shift towards higher growth analytics and decision tools, with a steady earnings estimate of $1.95 per share for 2026 [16][17] - **Yelp**: A Zacks Rank 2 (Buy) stock experiencing growth from increased ad spending and consumer traffic, with a steady earnings estimate of $2.39 per share for 2026 [20][21]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum, helping investors identify securities with high potential for market outperformance [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A being the highest score indicating a better chance of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score targets investors looking for undervalued stocks, utilizing financial ratios like P/E, PEG, and Price/Sales to identify attractive investment opportunities [3] Growth Score - The Growth Score emphasizes a company's future earnings potential and financial health, analyzing historical and projected earnings, sales, and cash flow [4] Momentum Score - The Momentum Score is designed for traders who capitalize on price trends, using metrics like short-term price changes and earnings estimate revisions to identify high-momentum stocks [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive rating that helps investors find stocks with the best value, growth prospects, and momentum [6] Zacks Rank Integration - The Zacks Rank is a proprietary model that uses earnings estimate revisions to identify stocks, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.9% since 1988, significantly outperforming the S&P 500 [7] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal investment success [9] Stock Highlight: Yelp (YELP) - Yelp, based in San Francisco, is rated 3 (Hold) on the Zacks Rank and has a VGM Score of A, indicating potential for growth [11] - The company is projected to achieve year-over-year earnings growth of 13.3% for the current fiscal year, with a recent upward revision in earnings estimates [12] - Yelp's average earnings surprise stands at +26.8%, making it a noteworthy option for growth investors [12]

Core Insights - Yelp is enhancing its AI capabilities through the acquisition of Hatch, an AI-powered customer communication platform, for approximately $270 million in cash, with an additional $30 million for employee retention over the next two to three years [2][3]. Company Strategy - The acquisition is a significant step in Yelp's AI transformation strategy, aimed at providing advanced AI tools to local businesses [2]. - Yelp plans to utilize Hatch's lead management solutions to better support service businesses in their AI adoption [2][3]. Technology and Innovation - Hatch, founded in 2018, offers solutions that improve customer communication and retention using conversational AI agents for SMS, email, and phone interactions [4]. - Yelp has been integrating AI tools over the past few years, including new AI-powered search capabilities in 2023 and AI-driven business summaries planned for 2024 [4]. Market Trends - The acquisition aligns with a broader trend where businesses are increasingly adopting agentic AI, with a significant drop in companies merely considering AI from 52% in August to 30% by November [6]. - By November, nearly 25% of chief product officers reported either piloting or fully implementing agentic AI, a substantial increase from just 3% in August [6][7].

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and invest confidently in the stock market [1][2] Zacks Style Scores - The Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - Stocks with higher Style Scores have a better chance of outperforming the market [3] Categories of Style Scores - **Value Score**: Focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales to highlight attractive investment opportunities [4] - **Growth Score**: Analyzes projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [5] - **Momentum Score**: Utilizes price trends and earnings estimate changes to identify favorable times to invest in high-momentum stocks [6] - **VGM Score**: Combines the three Style Scores to identify stocks with the best value, growth forecasts, and momentum [7] Zacks Rank and Style Scores Interaction - The Zacks Rank, based on earnings estimate revisions, helps investors build successful portfolios, with 1 (Strong Buy) stocks yielding an average annual return of +23.81% since 1988, outperforming the S&P 500 [8] - To maximize returns, investors should target stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with lower ranks (4 or 5) may still have good Style Scores but are likely to face downward price pressure due to negative earnings outlooks [11] Company Spotlight: Yelp (YELP) - Yelp, founded in 2004, operates as an online community providing information on various services, including restaurants and shopping [12] - Currently rated 3 (Hold) by Zacks, Yelp has a VGM Score of A and a Momentum Style Score of B, with shares up 6% in the past four weeks [12][13] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.05 to $2.13 per share, and an average earnings surprise of +26.8% [13]

Core Insights - Mountain Mike's Pizza was ranked 7 among U.S. restaurant chains and 9 overall on Yelp's Most Loved Brands of 2025 list [1]

Group 1: Company Overview - Yelp's competitive advantage is derived from its established brand, extensive user-generated content, and the integration of value-added services for businesses and consumers [1] - The company primarily generates revenue through cost-per-click and multi-location advertising, business page products, and subscription-based services targeting local businesses across various sectors [1][2] Group 2: Financial Performance - Yelp's stock has declined by approximately 20% over the past 12 months, with total revenue growth falling to low single digits in recent quarters due to weakening advertising demand and slowing engagement metrics [8] - Advertising clicks decreased by 11% year-over-year in the third quarter, while average cost-per-click (CPC) increased by 14% during the same period [9] - Revenue from the Restaurants, Retail & Other (RR&O) segment, which constitutes one-third of total revenue, fell by 2% year-over-year, attributed to lower ad spending due to macroeconomic and competitive pressures [9] Group 3: Insider Transactions - Joseph R Nachman, COO of Yelp, sold 20,325 shares in an open-market transaction for $611,845, which represented 9.40% of his direct holdings, significantly higher than the recent median of 2.34% per sale [5][4] - This transaction was part of a systematic disposition plan following SEC's Rule 10b5-1, indicating a larger-than-typical reduction in holdings [7] Group 4: Market Conditions - The adtech business is facing challenges due to reduced spending from lower- and mid-income consumers, leading to weaker same-store sales in retail and lower dine-out traffic in restaurants [6][10] - Yelp shares are trading at 12.7 times trailing 12-month earnings and 1.4 times sales, suggesting potential undervaluation, but the growth of advertising revenue is heavily dependent on macroeconomic conditions and competition [11]

Summary of Yelp Conference Call - December 09, 2025 Company Overview - **Company**: Yelp (NYSE:YELP) - **Industry**: Online local business directory and review platform Key Points and Arguments AI Strategy and Implementation - Yelp is embracing AI to transform user interaction, moving from traditional search methods to conversational interfaces that provide direct answers and actions [4][5] - The company emphasizes the importance of human-generated content, which is seen as a core asset, ensuring trustworthiness and authenticity in reviews [4][5] - Yelp is focusing on practical applications of AI, particularly through the development of the Yelp Assistant and voice products, which aim to enhance user experience and engagement [5][12] Unique Market Position - Yelp boasts nearly 30 million monthly active users, over 7 million businesses, and more than 500,000 paying locations, making it a unique asset in local search [6] - The company claims that 25%-40% of searches on Google have local intent, positioning Yelp as a key player in local search due to its comprehensive directory and curated reviews [8][9] Partnerships and Licensing - Yelp is actively pursuing partnerships to enhance its data licensing initiatives, currently collaborating with platforms like Apple Maps and Alexa [9] - The company believes it is well-positioned to be a leading partner in local search, leveraging its extensive database of reviews and ratings [9][10] User Experience and Engagement - The introduction of the Yelp Assistant aims to improve the request-to-quote process, making it more dynamic and context-specific [12][33] - Initial feedback on voice products has been positive, with users appreciating the human-like quality and responsiveness of the voice assistants [20][21] Financial Performance and Growth - Yelp has shifted its revenue model, with approximately 70% of ad revenue now coming from services, indicating a successful transition towards service-oriented offerings [32] - The company reported a 400% increase in request-to-quote requests through the Yelp Assistant, reflecting improved user engagement and information gathering [37] Cost Management and Margins - Yelp has not experienced significant pressure on margins despite increased spending on data and infrastructure, thanks to effective cost management strategies [41][42] - The company is leveraging competition in the AI model market to keep costs down while maintaining quality [42] Future Outlook - Yelp anticipates that AI will become ubiquitous within three years, although it acknowledges the current challenges in consumer trust and product reliability [29][30] - The company is committed to continuous experimentation and iteration in product development to enhance user experience and engagement [39] Additional Important Insights - The importance of brand equity and perception is highlighted, as users tend to trust Yelp's ratings more than unverified sources [10] - The company recognizes the need for businesses to engage with the platform to ensure their content is accurately represented in AI-driven interactions [21][26] - Yelp is focused on creating a seamless user experience that balances monetization with consumer satisfaction, avoiding an increase in perceived ad load [35][41]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a pressing concern regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of small cities, indicating a significant strain on global power grids [2][3] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI, making it a potentially lucrative investment opportunity [3][6][8] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and playing a crucial role in U.S. LNG exportation [5][7] - It is noted for its debt-free status and substantial cash reserves, which amount to nearly one-third of its market capitalization, providing a strong financial foundation [8][10] - The company also holds a significant equity stake in another AI-related venture, offering investors indirect exposure to multiple growth opportunities in the AI sector [9][10] Market Dynamics - The current market environment is characterized by rising electricity prices and strained power grids, creating a backdrop for the company's growth potential [2][3] - The company is well-positioned to capitalize on the onshoring trend driven by tariffs, as it is expected to support the rebuilding and retrofitting of domestic manufacturing facilities [5][6] - The influx of talent into the AI sector is anticipated to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure [12][14] Future Outlook - The company is poised to benefit from the AI infrastructure supercycle, the onshoring boom, and the surge in U.S. LNG exports, positioning it as a critical player in the future of clean and reliable power [14] - The potential for significant returns is highlighted, with projections suggesting a possible 100% return within 12 to 24 months for investors who act now [15][19]

Core Thesis - Yelp Inc. is viewed as a compelling investment opportunity due to its deeply discounted trading multiples and the full pricing in of near-term concerns [2][6] Financial Metrics - As of December 1st, Yelp's share price was $28.62, with a trailing P/E of 12.91 and trading at 4x EBITDA, 13x trailing earnings, and 1.4x sales [1][2] - The company has rising EBITDA margins and declining EV/EBITDA ratios, indicating undervaluation compared to peers [4] User Engagement and Brand Strength - Yelp's user base remains engaged, particularly among younger demographics, and the platform enjoys strong brand recognition and trust [3] - The integration into Apple's ecosystem presents strategic optionality, including the potential for acquisition by Apple, which could enhance the platform's reach [3] Shareholder Value and Financial Strategy - Share repurchases have significantly reduced the outstanding share count, although this has not yet been reflected in stock performance [5] - Yelp ranks in the top decile of the Magic Formula, showcasing strong ROIC and EV/EBITDA metrics relative to the broader market [5] Strategic Opportunities - The fragmented ownership and founder-led structure create an environment conducive to activist intervention or strategic transactions [6] - A potential sale to Apple at a premium could unlock substantial value, positioning Yelp's data set as a core asset for AI-driven monetization [6] Overall Investment Profile - Yelp is characterized by a rare combination of undervalued tangible and intangible assets, resilient revenue streams, and strategic optionality, offering a highly asymmetric risk/reward profile for investors [6]

Core Insights - Yelp Inc. will present at the Raymond James TMT & Consumer Conference on December 9, 2025, at 9:20 a.m. Eastern Time [1] - The live and archived webcasts of the presentation will be available on the company's investor relations website for 180 days post-presentation [2] Company Overview - Yelp Inc. is a community-driven platform that connects users with local businesses, providing trusted information, reviews, and photos to aid spending decisions [2] - Founded in San Francisco in 2004, Yelp serves as a one-stop platform for consumers to discover, connect, and transact with businesses across various categories [2] Financial Results - Yelp will release its financial results for the third quarter ended September 30, 2025, after market close on November 6, 2025 [6] - The third quarter results will reflect the company's ongoing execution of its product-led strategy, as stated by CEO Jeremy Stoppelman [5] Product Updates - Yelp announced a significant AI update as part of its 2025 Fall Product Release, introducing over 35 new features aimed at enhancing local discovery [7] - The new features will make the experience more conversational and personalized, with Yelp Assistant now able to answer questions about various local businesses [7]