2016 has been brutal for Yelp investors. Shares of the local reviews giant have fallen more than 30% since the beginning of the year. Part of that decline was fueled by the release of the company's fourth-quarter earnings earlier this month. Although Yelp exceeded analysts' expectations, its future is looking increasingly unclear.
During the company's subsequent earnings call, CEO Jeremy Stoppelman, CFO Rob Krolik, and COO Geoff Donaker spoke about the trends currently affecting the business and their outlook for the future. Here are five of the most important quotes from that call (transcript provided by Thomson Reuters).
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Ramping up marketing to boost smartphone penetrationOver the last few years, Yelp has shifted its focus from its website to its app. Users of Yelp's app are more engaged, and the company can target would-be buyers more effectively. Yelp has managed to rack up about 20 million average monthly app visitors, but there are still millions more smartphone users that could be enticed to make use of the Yelp app. During the call, Stoppelman explained the opportunity facing the company and how Yelp hopes to add to additional users.
Other numbers investors might want to knowYelp remains a speculative investment, as the company has not been consistently profitable in its history as a publicly traded firm. Instead of focusing on earnings, then, investors have seemingly put more emphasis on its future prospects. Data on Yelp's traffic, its number of reviews, and popularity of its app have helped to offer a sense of the company's potential. During the call, Krolik offered up data on these various metrics.
About that $1 billion figure...In the past, Krolik had offered Yelp investors a long-term target for the company's revenue. Specifically, Yelp hoped to generate sales of $1 billion by 2017. That's still possible, but given Yelp's current rate of growth, seems increasingly unlikely. During the call, Krolik was asked about that target. Notably, he failed to reaffirm it.
A long runway for local advertisingDuring the call, Donaker spoke about the larger opportunity for the company and how he sees its business evolving in the years ahead. Although its recent growth has beendisappointing, thereare still many local businesses that could be enticed to advertise on Yelp in the coming years and some additional transactional opportunities.
Eat24 acquisition was a successEarly last year, Yelp acquired Eat24, a food delivery start-up. In 2015, Eat24's revenue grew more than 80% on an annual basis. During the call, Stoppelman explained how the Eat24 business was able to grow so rapidly.
The article 5 Things Yelp Inc. Management Wants You to Know originally appeared on Fool.com.
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