Yelp Inc. (NYSE: YELP) released its earnings Wednesday after the markets closed, but investors did not receive them well. Analysts had something to say as well. The local business guide company posted a diluted earnings per share (EPS) loss of $0.02 on revenues of $118.5 million. In the first quarter of 2014, Yelp reported a net loss of $0.04 per share on revenues of $76.41 million. The Thomson Reuters estimates for the first quarter had called for EPS of $0.01 and $119.98 million in revenue.

On a non-GAAP basis, Yelp posted EPS of $0.10 per share, which excludes stock-based compensation and amortization of intangible asset charges of $79 billion. Adjusted EBITDA totaled $16.3 million in the quarter.

Average monthly mobile unique visitors grew 29% year over year to approximately 79 million, and average monthly desktop unique visitors declined 3% year over year to about 80 million. Average monthly unique visitors (desktop and mobile web) grew 8% year over year to approximately 142 million. Local advertising revenue grew by 51% year over year to $98.6 million, while brand advertising revenue fell 11% to $6.6 million.

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Credit Suisse stated its investment case as:

Yelp missed first quarter of 2015 due self-inflicted headwinds from a sales force reorganization which was reversed intra-quarter. And as it has already seen a return to normality in sales force productivity in the second quarter of 2015, we look through the first quarter miscue and focus on KPIs which assuage concerns around traffic and advertiser growth. In particular we are encouraged by the subscriber adoption of CPC-based advertising, which stands at 40% of total – this may weigh on average revenue per user (ARPU) growth near term, but we believe this has long term potential to drive spending much higher. Additionally, we believe guidance parameters could prove conservative as Yelp is poised to 1) release mobile inventory to programmatic buying, 2) recover local advertising conversion. We maintain our Outperform rating and are buyers on weakness as we continue to believe Yelp remains an open ended growth story with a differentiated content offering and consumer value proposition.

According to Merrill Lynch:

No longer a beat and raise story; Lowering to Neutral Revenue/EBITDA of $118.5million and $16.3 million was below the Street at $119.8 million and $20.6 million due to brand revenue miss and poor sales force execution. Yelp maintained 2015 outlook, now backend loaded. We are below guide on revenue. Street will be cautious on 2H acceleration implied in outlook given recent trends. Lowering to Neutral, price objective to $55.

Wells Fargo detailed in its report:

Valuation range $45.00 to $47.00 from $55.00 to $57.00 The midpoint of our valuation range equates to 27.1x our 2016 EBITDA estimate, a premium to the group that we view as supported by our estimated 2013-2016E EBITDA CAGR of 50%. Risks include dependence upon Google organic search, competition for local ad spend, potentially negative small business sentiment, uncertain international operating dynamics, and increasing paying account churn.

Investment Thesis: We view Yelp as well positioned to capitalize on three important digital trends: the embrace of digital marketing by laggard small business, the growing liquidity and importance of social recommendation, and the migration of content consumption to mobile platforms. Our view is tempered by concerns regarding paying account conversion and a valuation we believe fully reflects investment positives.

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Janney Capital Markets has Neutral rating. According to the brokerage firm:

First quarter missed with revenue and EBITDA of $119 and $16.3 million vs. Street at $120 million and $20.6 million. Second quarter guidance is below the Street while the 2015 fiscal year was maintained due to 1) change in sales force productivity and 2) higher quarter over quarter Brand $. While the miss in LAA was largely explained by sales force territory shifts, we believe implied second half guidance bakes in a material improvement in pricing (CPC shift). Mobile app engagement appears to be strengthening. We reiterate our Neutral rating and lower our FV to $48 based on 20x our 2016 fiscal year EBITDA of $170 million.

Sterne Agee stated in its report:

We are lowering our rating on Yelp from Buy to Neutral for the following reasons: 1) first quarter revenue/EBITDA missed expectations and second quarter guidance is below expectations; 2) Recent cohort performance was below expectations; 3) international traffic continues to be flat despite Yelp’s expansion in additional countries, leading us to question the international opportunity; 4) Full year guidance assumes back-half re-acceleration but we feel visibility on that is limited. While we still believe the long-term opportunity for Yelp is large (management is guiding $1 billion in revenue for 2017 or 3-year CAGR of 38%) and its content and community are moats, we think the stock will likely struggle in the near term.

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A few other analysts threw in their two cents after earnings as well:

• Cantor Fitzgerald lowered its price target to $68 from $78.
• Oppenheimer had an Outperform rating but lowered its price target from $76 to $60.
• Needham reiterated a Buy rating but lowered its price target to $55 from $80.
• Wunderlich had a Buy rating and lowered its price target to $75 from $90.
• RBC Capital downgraded Yelp to a Sector Perform from an Outperform rating.

Note that shares of Yelp hit a 52-week low of $40.14 in morning trading Thursday. The 52-week high is $86.88, and the consensus analyst price target is $66.14.

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