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Yelp shares rise on an earnings beat

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Yelp shares rise on an earnings beat

Yelp (NYSE:YELP) has done especially well since its initial public offering in early 2012. Shares have risen more than 178% on the back of strong revenues and user traffic. While some have feared the company may never be able to monetize its traffic, the company has actively pursued additional revenue streams on top of the traditional display advertisements it already uses. Shares moved even further to the upside following the company’s second quarter results after the market close on Wednesday.

Yelp was able to beat analyst consensus estimates on both the top and bottom lines. The company reported a second quarter loss of $0.01 per share on revenue of $55 million. Where as analysts expected a second quarter loss of $0.04 per share on revenue of $53.3 million. The better than anticipated results were driven by the launch of six new markets, two domestic and four international. Moreover, management looked to integrate Qype content and its European traffic into its brand.

At the end of the day, Yelp is still an online reviews company with more than 42.5 million cumulative reviews offering consumers detailed recommendations of everything from dining, to drinking, to massages. During the three months that make up the quarter the company generated 108 million unique visitors per month, of which 10.8 million came from mobile devices. Going forward, the company is expected to report net revenue of $58 million to $59 million during the third quarter within negligible losses. Over the coming months it will be interesting to see if the company can justify its lofty valuations amidst increasing competition. In the meantime analysts will be watching to see if the company’s new ventures including online reservations, booking, and shopping can create meaningful revenue streams in addition to advertising. Shares have already moved higher by a whopping 121% this year alone. During the after hours session shares close up 7.49% to $44.93 on moderate volume.

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