Yelp (YELP) Trims 2025 Outlook After Revenue Growth—What Does This Reveal About Its Long-Term Strategy?

• Yelp Inc. reported third quarter 2025 results showing year-over-year growth in revenue to US$376.04 million and net income to US$39.32 million, while also completing a share repurchase of 1,596,000 shares during the quarter.
• The company lowered its full-year 2025 net revenue outlook by US$8 million at the midpoint, signaling a more cautious business forecast despite recent growth.
• We'll examine the impact of Yelp's reduced 2025 revenue guidance on its investment narrative and future business expectations.

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Yelp Investment Narrative Recap

To be a Yelp shareholder, you need to believe the company can sustain growth in digital advertising and capitalize on its investments in AI-powered features to drive user engagement and advertiser demand. The recent reduction in revenue guidance for 2025 sends a more cautious signal, but the effect on near-term catalysts like accelerating AI adoption and workflow integrations does not appear material at this stage. The biggest immediate risk remains Yelp’s exposure to persistent weak advertiser demand under economic uncertainty.

Among recent announcements, the Q3 earnings report stands out by showing continued year-over-year revenue and net income growth. This performance provides some reassurance to those focused on catalysts such as new product adoption and increased workflow automation, even as the updated guidance introduces a note of caution for future quarters.

Conversely, investors should be aware that renewed concerns about advertiser retention and potential declines in high-margin segments could...

Read the full narrative on Yelp (it's free!)

Yelp's outlook anticipates $1.6 billion in revenue and $193.5 million in earnings by 2028. This is based on a 3.5% annual revenue growth rate and an increase in earnings of $44.4 million from the current $149.1 million.

Uncover how Yelp's forecasts yield a $34.44 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community range widely, from US$19.95 to US$116.69 per share. While many see value, persistent weak advertiser demand flagged in recent guidance presents a challenge that shapes future expectations.

Explore 5 other fair value estimates on Yelp - why the stock might be worth over 3x more than the current price!

Build Your Own Yelp Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Yelp research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Yelp research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Yelp's overall financial health at a glance.

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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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