RBC Names $YELP Top Small Cap Pick for 2017, Cites Significant Brand Improvement

$YELP has always been my favorite internet stock, probably because I’m a foodie. But in recent years, I’ve noticed their reviews have expanded past restaurants and into things to do, a huge step into becoming God Emperor of all, the knower of everything.

YELP is one of 15 of my portfolio stocks in my GARP index held in Exodus (we’re running free trials now, click on an ad to access) and has just been named RBC’s top small cap idea for 2017 with a price target of $55.

source: Briefing

Yelp: RAQ attack! YELP is RBC’s #1 Small Cap long for ’17

RBC Capital Mkts reiterates Outperform, $55 tgt on YELP in the wake of positive results from firm’s third annual consumer survey, a deep dive into the company’s new Request A Quote offering, and Online traffic checks. Yelp remains their #1 SMID Cap Long. Firm conducted their third annual Yelp survey of more than 2,800 respondents. Key takes: 1) Yelp’s Brand Recognition Has Risen Significantly — From 66% in ’14 to practically 100% in ’16. 2) Yelp’s Usage Has Increased As Well — From 37% of U.S. ‘Net users ‘in 14 to 65% in ’16. 3) The Perceived Usefulness Of Yelp Is Rising — 76% view Yelp as useful vs. 73% in ’15. 4) Users Find Yelp Reviews More Useful And Accurate And Contribute To Them More — 50% of Yelp users have written reviews, up from 41% in ’15…signals rising engagement; 5) Yelp’s Competitive Position Vs. Google And Other Review Sites Remains Mixed

Out of all the survey data, seeing 65% of people saying the site was useful, compared to just 37% a few years ago, it speaks volumes about how well the brand is expanding. Although unable to earn a lot of money due to their insatiable desire for growth, I think YELP will be acquired in 2017 and fetch a very high premium for its amazing service.