May 13, 2019

Yelp's stock erased its entire 2019 gain in one day

Expand chart
Data: Investing.com; Chart: Axios Visuals

Yelp posted solid earnings for the first quarter but its forward guidance was unimpressive and led to a rout in its stock price to end last week, erasing all of its 2019 gains.

Details: The company said it anticipates revenue will rise 4%–6% year over year, short of the roughly 6.6% increase investors were expecting. It's also not on pace for the 8%–10% annual increase Yelp predicted in its full year guidance and well short of the mid-teens percentage growth Yelp pegged for 2019-2023.

  • Having been a public company since 2012, investors are growing impatient with Yelp's inability to break into the mainstream and grab major chunks of online advertising revenue.

What they're saying:

  • Research firm B. Riley downgraded the stock from Buy to Neutral after the earnings report.
  • Morgan Stanley, saying there are "not enough customers," reiterated its underweight position.
  • UBS called the company "a work in progress" and maintained a less constructive outlook.
  • In January, SQN Investors, a major shareholder, urged Yelp to shake up its board of directors, saying their patience had "worn out."

The kind of people who use Yelp are more likely than the average consumer to be influenced by online advertising, research firm Civic Science notes.

  • "That means, if Yelp's ad business grows to any measurable scale, they should be able to demonstrate superior effectiveness compared to other platforms," John Dick, the firm's founder and CEO said in a note to clients.

The bottom line: However, the firm also notes in a recent post that Yelp is falling short. "Only 1/3 of Yelp fans say online advertising (in general) guides decisions. When looking at favorability among business owners- more than1/4 have a negative opinion of Yelp."

Go deeper: Yelp's new economic indicator shows a slowdown

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 2 p.m. ET: 5,453,784 — Total deaths: 345,886 — Total recoveries — 2,191,310Map.
  2. U.S.: Total confirmed cases as of 2 p.m. ET: 1,651,254 — Total deaths: 97,850 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: Top Boris Johnson aide defends himself after allegations he broke U.K. lockdown — WHO suspends trial of hydroxychloroquine over safety concerns.
  4. 2020: Trump threatens to move Republican convention from North Carolina — Joe Biden makes first public appearance in two months.
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 1 hour ago - Politics & Policy

Joe Biden makes first public appearance in over two months

Photo: Oliver Douliery/AFP via Getty Images

Former Vice President Joe Biden made his first in-person appearance in over two months on Monday to honor Memorial Day by laying a wreath at a Delaware veterans park, AP reports.

Why it matters: Biden, the Democratic Party's presumptive nominee, has taken the unprecedented step of campaigning from his home during the coronavirus pandemic, ever since canceling a rally in Cleveland on March 10.

WHO temporarily suspends trial of hydroxychloroquine over safety concerns

Photo: Fabrice Coffrini/AFP via Getty Images

The World Health Organization is temporarily pausing tests of the anti-malarial drug hydroxychloroquine as a coronavirus treatment in order to review safety concerns, the agency's director-general Tedros Adhanom Ghebreyesu said Monday.

Why it matters: The decision comes after a retrospective review published in The Lancet found that coronavirus patients who took hydroxychloroquine or its related drug chloroquine were more likely to die or develop an irregular heart rhythm that can lead to sudden cardiac death, compared to those who did nothing.