Business

Yelp Inc (NYSE:YELP) Performance Slows Amid Calls For Board Shake-Up

The US jobs report came out last week, and it was disappointing. Further, it seems there is only one way the US-China trade war will go, and that is up. As such, US stocks are underperforming. However, Yelp Inc (NYSE:YELP) is trying to gain on the losses encountered in the last 52-week trading period.

Yelp share price performance

As a result of the doldrums in the global markets, the Dow Jones Industrial Average fell 2.24 percent. This is only in the last 24-hour trading period. Interestingly, the S&P 500 Index also fell by almost the same measure.

In particular, economists forecasted an increase in jobs for November at approximately 190,000. However, the jobs report out just days ago indicates only 155,000 in jobs increase for November. For just the past week, Nasdaq fell 4.9% while S&P 500 and the Dow Jones both fell 4.5% and 4.6% respectively.

Looking at the stock price for Yelp, the story is all the same. Over the last 52 weeks of trading, Yelp recorded a decline of 17.41%. If we extrapolate that to the last three months, the value of the decline becomes bigger. Particularly, the performance for the previous three months is down 23.57%. Further, the last six months saw the stock value drop -17.72%.

However, there seem to be hopes for a turnaround especially since the last seven days saw a positive jump. Particularly, YELP’s stock is 22.32% for the past one trading month as well as 2.22% for the past one week.

Price analysis

Mid-November was not particularly good for YELP. The period saw YELP’s stock price drop from 42.54 to below 20 in just a matter of days. However, the stock is so far 22.32% stronger over the last one month of trading.

Further, both the 50-day and 200-day moving averages establish resistance at ceilings not far from the current price. At present, the share is trading at 35.64. This is against the $34.59 closing price for Friday last week.

In particular, YELP’s 50-day moving average is 39.51 which is lower than the 200-day value of 42.54. Basically, there is still hope that the share might go up, but it will be difficult to breach the two resistances.

The performance for the share might be picking up in the last 30 days, but the long-term is still shaky. For the year-to-date period, the stock shed off 17.56% of its value.

Further, the Relative Strength Index (RSI) is indicative of weak momentum for the stock. Notably, the RSI for the stock stands at 40.98. Usually, values closer to 100 indicate a very high momentum for the stock. It indicates that there is a lot of price action on the part of investors. Therefore, the RSI value for YELP suggests a stock whose momentum is weak.

Another important indicator is the Williams Percent Range (Williams %R). For YELP, the Williams %R stands at -11.80. Since values over -20 indicate an overbought situation, it is clear that YELP’s stock is overbought.

Future performance

Yelp Inc faces significant challenges going forward. Notably, one of the company’s significant shareholders seems to lack confidence in the current board. In a letter to the board, SQN Investors decried the ineffectiveness of the board.

“We are deeply concerned by the Board’s lack of urgency in addressing many of the issues facing Yelp. In our view, the Board has failed to hold itself and Management accountable for the Company’s strategic and operational missteps, repeated missed earnings, lost opportunities, and poor corporate governance,” the letter reads in part.

If the company addresses such concerns, there will definitely be better results in the coming quarters.

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