Yelp Stock Triples: Are Investors Giving This Business Too Much Respect?

With Tesla's race to new highs in recent weeks, I've found myself wondering when a potential Rule Breaker can be considered overvalued. Yelp might finally be getting close.

Look at the numbers. Yelp stock has more than tripled year-to-date, far outpacing the 68% revenue growth the company has achieved in each of the past two quarters. Improving usage data has investors betting big on Yelp's Rule Breaking potential.

YELP Total Return Price Chart

YELP Total Return Price data by YCharts

I can appreciate their optimism. Cumulative reviews jumped 41% last quarter as active local business accounts grew 62%. All told, Yelp now serves more than 108 million monthly visitors, with a growing number coming from mobile devices. (The company says every second a consumer uses a Yelp mobile app to call a local business or generate directions.)

We could see even better numbers soon. Last week the company introduced on-the-go reviews in a revised Android app. A new iOS version sports improved navigation and other "polish," such as better scrolling and animated icons.

I'm glad to see the updates, especially on Android. Yelp may be hugging Apple, but Google's Android still powers hundreds of millions of millions of devices around the world. That's a huge addressable market that Yelp needs to do a better job of winning. I won't be buying till I see evidence that it has.

Do you agree? Would you buy Yelp stock at current prices? Leave a comment to let us know what you think.

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The article Yelp Stock Triples: Are Investors Giving This Business Too Much Respect? originally appeared on

Fool contributor Tim Beyers is a member of the  Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends and owns shares of Apple, Google, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Daniel A Bernath

Judges in California and Oregon have stated that Yelp is like the "Mafia" and "Organized Crime". Judge Henry Kantor in Oregon said that Yelp's business model is "offensive".
The judge believes that the Oregon Attorney General has an investigation pending regarding Yelp's treatment of businesses and that Yelp's business model is "problematic."

FOOTNOTE: Judge Henry Kanton, Oregon Circuit Court, Portland October, 7, 2013 at 10:56

“ I’ve been watching and paying attention to what both Mr. Bernath said and actually other things out that I’ve read out what’s going on with Yelp and the way its handing businesses it has business with. I find it offensive, I know there are class actions pending…it would not shock me at all if actually Mr. Bernath gets some relief for the way yelp is conducting its business model. I think (Yelp’s ethics are) its highly problematic
If Oregon attorney general office has not initiated something I suspect they will. I don’t thinks this is any shock. Yelp knows this in a more sophisticated way then I do. In fact I believe there may be something pending. And I think down the line Yelp has to change or its going to look like what Mr. Bernath describes it; organized crime.”

October 18 2013 at 2:00 PM Report abuse rate up rate down Reply