YELP
Yelp Inc.
$19.45
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 77.1% below fair value
You pay
$19.45
Bear
$81.07
Fair
$84.91
Bull
$91.57
Bear
$81.07
+316.8%
3% stage 1 growth, 11% discount
Fair
$84.91
+336.6%
4% stage 1 growth, 11% discount
Bull
$91.57
+370.8%
5% stage 1 growth, 11% discount
Adjust Assumptions
3.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
33%
Implied Market Multiple
2.4x
Market is pricing in (growth)
-24.2%
vs 3.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (67 analysts)
$25.00
Divergence from AlphaVal
240%
Summary
Using a two-stage FCF DCF with 4% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $84.91 per share.
Warnings
Wall Street's average price target is $25.00 (from 67 analysts). Our estimate is 240% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions