Reviews site Yelp shot up more than 10% Monday after it got a rating upgrade from Goldman Sachs. It continued rising and the IBD Relative Strength (RS) Rating for Yelp stock soared to 92 Tuesday, up from 86 the day before. The 92 RS Rating puts it in the top 8% of all stocks for price performance over the past 12 months.
IBD sister publication Barron's noted in a Monday story that Yelp shares were rising fast "after Goldman Sachs analysts said they believe the local recommendation site can maintain sizable revenue growth." Goldman analysts raised the rating on Yelp from neutral to buy, with a 47 price target, the report said
Yelp Stock Tops Cup Pattern Buy Point
Yelp stock formed a long cup base starting in late October 2022 and topped the 39.27 buy point Monday. The stock gapped up 10.2% Monday to 42.02, and another nearly 3% Tuesday, according to MarketWatch. It's 43.27 close Tuesday is the highest price since August 2021.
Decades of market research reveals that the market's biggest winners tend to have an 80 or higher RS Rating at the beginning of a new climb. Yelp stock is in that exclusive group.
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Among its other ratings Yelp has a strong 86 Composite Rating, placing it in the top 14% of all stocks overall. Another bullish indicator is its A Accumulation/Distribution Rating on an A+ to E scale with A+ Superb and E dismal. The A rating shows that institutional investors such as insurance funds, ETFs and mutual funds are loading up on Yelp stock. One yellow flag is its 9 EPS Rating, in part reflecting its poor performance when the economy was shut down during the pandemic.
Yelp stock is now considered extended and out of buy range after clearing the buy point in the first-stage cup base. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average.
Sales Strong, Earnings Growth Needs Tending
Yelp reported a 2 cents per share loss last quarter, vs. a 1-cent loss the same quarter a year earlier. It has reported double-digit revenue growth for at least a year. Last quarter its sales rose 13% to $312.4 million, matching its growth rate the prior quarter. The company is expected to report its latest results on or around Aug. 3.
Yelp stock earns the No. 14 rank among its peers in the Internet-Content industry group. LegalZoom, Opera and Weave Communications are among the top 5 highly rated stocks within the group.
When researching the best stocks to buy and watch, a stock's relative price strength is a good indicator.
The exclusive Relative Strength Rating from Investor's Business Daily identifies market leadership with a 1 (worst) to 99 (best) score. The rating shows how a stock's price movement over the last 52 weeks compares to all the other stocks in our database.
