A Fresh Valuation Look at Yelp (YELP) Following Its New DoorDash Partnership

Yelp (YELP) is rolling out a partnership with DoorDash, giving users the ability to order food delivery from over half a million merchants directly within its platform. This move allows Yelp to deepen consumer engagement and respond to recent challenges in its restaurant-related business.

See our latest analysis for Yelp.

Yelp’s collaboration with DoorDash follows a period where momentum in the stock has eased, as the 1-year total shareholder return stands at -0.05% and 3-year returns are still under water. While recent innovations, such as the DoorDash partnership and expansion into AI-powered data licensing, suggest real long-term growth potential, investors remain cautious after a lukewarm run and modest short-term performance.

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But with new partnerships and innovations underway, is Yelp’s current share price overlooking untapped upside? Alternatively, are expectations for future gains already built in, leaving little room for a bargain?

Most Popular Narrative: 4.7% Undervalued

Shares of Yelp last closed at $32.82, just below the $34.44 narrative fair value. This sets up a fascinating debate on whether the market fully appreciates the forward outlook.

The rapid adoption and expansion of AI-powered features such as Yelp Assistant and the rollout of new entry points (including to logged-out users) are expected to boost overall user engagement and strengthen the platform's stickiness. This should contribute to increased lead generation and higher advertising revenues over time. Strong momentum in AI search API usage and data licensing revenue demonstrates Yelp's growing value as a data partner for emerging AI-powered search players. With a $10 million annual run-rate already achieved, there is significant potential for diversifying and expanding revenue streams.

Read the complete narrative.

Want to know what’s driving the fair value above today’s price? The secret lies in bold assumptions around future engagement, revenue sources, and margin gains. What if the next phase of AI growth is even larger than consensus expects? Tempted to unpack the forecast logic powering this narrative? Dive into the details to see which controversial projections have pushed the fair value higher.

Result: Fair Value of $34.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent declines in core restaurant revenue and intensified competition from larger digital platforms could quickly undermine Yelp’s long-term growth narrative.

Find out about the key risks to this Yelp narrative.

Build Your Own Yelp Narrative

If you’d rather challenge these assumptions or follow your own path to insight, why not see what story you can build yourself in just a few minutes? Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Yelp.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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