The brokerage company has upgraded the stock from “neutral” to “buy”.
The shares of Yelp Inc. (NYSE: YELP) rose 6.6% to trade at $ 39.59 on the last check after the reviews website was upgraded from Citigroup to Buy from Neutral and a price target increase from $ 33 to $ 48. The reporting analyst expects strong growth and operational leverage. The company will benefit from reopening local businesses, shifting revenue to the self-service channel and reducing leasing costs over the next few years.
In the charts, the share price had risen since the end of 2020 and last reached a three-year high of USD 43.85 on March 15. While stocks have since pulled back, the supportive 60-day moving average came as some sort of support, alongside the $ 36 level. Yelp stock is up 112.2% year over year.
The brokerage group is still hesitant about certainty, with 13 of the 15 in question having a lukewarm “hold” or lower rating while the remaining two saying “buy” or better. Additionally, the 12 month consensus price target of $ 37.20 is exactly on the current level. This leaves the door wide open for further upgrades and / or price target increases.
Meanwhile, short sellers are coming to the exits, although there is still a lot of pessimism left to be wound down. Short rates fell 11.5% in the last two reporting periods. However, the 4.25 million short stocks sold still account for a whopping 6% of the security’s available float.
Additional tailwind could result from a shift in the option pits. This corresponds to the 10-day put / call volume ratio of Yelp stock of 1.51 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), which are in the 91st percentile their annual range. This means that puts are picked up faster than usual.
After all, now seems like a good time to weigh YELP’s next step with options. The security’s Schaeffer Volatility Index (SVI) of 53% is in the 10th percentile for the past 12 months, indicating that the stock sport rewards are currently being offered at affordable prices.