Tigress Sees Attractive Valuation In Yelp

Since David Einhorn announced his position in Yelp Inc (NYSE: YELP) on May 3, shares have traded up 18 percent. The Greenlight Capital hedge fund manager isn't the only one bullish on the local advertising company, as Tigress Financial's Phillip Van Deusen reiterated his Buy rating, citing an attractive long-term market and attractive valuation.

Van Deusen thinks Yelp can eat into a significant share of the $7 billion yellow page advertising market. A reason for this is because small business owners are skewing to a younger demographic, making a more natural move to online and mobile advertising. Van Deusen also believes Yelp will prove to be better ROI versus the antiquated yellow page advertising, especially in the cost per click model that will emphasize value for small business owners.

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As for valuation, Van Deusen projects 25 percent increase in revenue next year. He believes this increase actually sides on the err of caution, as this target would be a 40 percent growth deceleration over the prior 12 months. With limited downside, given a re-acceleration in business performance metrics, Van Deusen finds Yelp's current valuation very attractive.

Shares of Yelp were trading down 0.6 percent near the close of Monday's session at $26.68.