The positive surprise in the recent earnings has led to a lot of upgrades for the stock. The power of the Yelp brand and the potential of the mobile segment had its effect. JP Morgan increased the price target to $52 and Credit Suisse raised the price target to $56. Jefferies analyst has a new PT of $50 for the stock. The stock has appreciated significantly over the last few weeks, and the sentiments have improved even further. The company guidance for Q3'13 is for net revenue in the range of $58 million to $59 million and adjusted EBITDA in the range of $7.5 to $8.0 million. For the full fiscal, the guidance was raised to $222 million to $224 million for revenues, and adjusted EBITDA in the range of $27 million to $28 million. In H1'13, the revenues were $101.2 million, up 68% compared to $60 million in H1'12. The net loss for H1'13 declined sharply to $5.7 million or 9 cents per share, compared to a net loss of $11.8 million or 26 cents per share in H1'12. Importantly, the adjusted EBITDA for H1'13 was approximately $11 million compared to $630K in H1'12. So the bottom-line is showing improvement, and the revenue growth continues to be robust. This has changed the outlook for the stock totally. The liquidity position remained good and it has zero debt. Competition from players like Google (GOOG) and Yahoo (YHOO) is strong, and there are smaller players in same or other segments like IZEA (IZEA) (native advertising, social media sponsorship) which are likely to provide direct / indirect competition. So the company is surely getting there, but is not there yet. The stock has moved significantly in anticipation, and the fundamentals will need to keep catching up. The potential is huge, but after such a huge rise, it is good to remain a bit cautious.
