Is Yelp Inc. (YELP) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $19.58, Yelp Inc. (YELP) trades 53% below TickerWorth's blended fair value of $41.30 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices YELP undervalued vs our estimate of what the business is intrinsically worth. Our fair value sits above the market, an implied +111.0% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values YELP at about $28.31 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts Yelp Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 9.8%, with a long-run terminal growth rate of 2.5%. About 74% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -10.4% annual revenue growth for YELP. Our base case instead compounds to about 1.4% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, YELP's modeled DCF value ranges from about $21.49 to $42.23 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Yelp Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of YELP's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind YELP's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $1,464,955,000 | Yelp FY2025 10-K (accession 0001345016-26-000019, filed 2026-02-27): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 = $1,464,955K, +3.7% on FY2024 $1,412,064K. Mix: Services advertising $948M (+8%), Restaurants, Retail & Other (RR&O) advertising $444M (-6%), Other revenue ~$73M (+17%). Calendar fiscal year. CROSS-CHECK: H1 2026 revenue $736,976K, +1.1% on H1 2025 ($728,928K); TTM to 2026-06-30 $1,473.0M. Inside that +1%, advertising fell 3% (RR&O -10%) and Other revenue rose 87%, much of it the acquired Hatch business ($14.1M since 2026-02-02). |
| Base EBIT margin | 12.6% | Yelp FY2025 10-K (accession 0001345016-26-000019, filed 2026-02-27): us-gaap:OperatingIncomeLoss FY2025 $184,521K / $1,464,955K = 12.60% GAAP operating margin, AFTER $134.0M of stock-based compensation (9.1% of revenue) and $50.1M of D&A. This is the PEAK GAAP margin in Yelp's history (FY2023 5.9%, FY2024 10.7%) and it is NOT the run-rate: H1 2026 GAAP operating income was $71,028K on $736,976K = 9.64% (H1 2025: 11.35%), and the FY2026 guide implies ~8.9% (see forecast note). TTM to 2026-06-30: $172.8M / $1,473.0M = 11.7%. Because the base is the peak, the mechanical 'margin fade' test compares Year 5 with 12.6%; Year 5 here is 12.0%, so the model does not trip the cyclical flag, and that is deliberate — the 2026 dip is an investment year plus acquisition costs, not a cycle. |
| Forecast revenue growth | 0% → 1% → 2% → 2% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide input shared by every researched model. |
| Beta | 1.00 | Assumption — normalized estimate (published yfinance 5Y-monthly beta 0.452): NORMALIZED UP from the published 0.452 to 1.0 — CONSERVATIVE (raises WACC, lowers value). A 0.45 beta would give Yelp a 7.5% cost of equity, about the yield on the high-yield market, for a ~$1B small-cap whose revenue is flat, whose ad clicks are falling and whose core product is directly exposed to AI search. The published figure is low because Yelp's returns have been dominated by company-specific moves (a 52-week range of roughly $17-$34 while the market rose), which drags down correlation without making the business less risky. 1.0 is market risk — a neutral stand-in, below what an unlevered internet-advertising peer set would typically show. At the published 0.452 the model gives ~$44 (WACC 7.3%); at 1.2 it gives ~$25. This is the single largest judgement call in the file. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5%, kept for comparability. FLAG: generous for a company guiding to 0% growth this year with advertising volumes falling; it assumes the Other-revenue build succeeds and advertising stabilises in the long run. 2.0% takes ~$1.45/share off. Well below the 9.75% WACC. |
| Diluted shares | 56M | Yelp Q2 2026 results release, 8-K Ex-99.1 (accession 0001345016-26-000059, filed 2026-08-06): Q2 2026 weighted-average diluted shares 55,726K (Q1 2026: 59,374K; FY2025: 65,090K; FY2024: 70,611K) — a 15% YoY reduction from buybacks. CONSERVATIVE: only 54,263,621 shares were outstanding on 2026-07-31 after a further ~$25M of July repurchases, which would add ~$0.75/share. Buybacks are now PAUSED for the rest of 2026 while the revolver is repaid, so the count will drift up with stock compensation until they resume in 2027. |
| Market price | $19.58 | Delayed quote · as of 2026-11-10 05:50 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Communication stocks · All valued stocks · Interactive YELP valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.