The widespread digital transformation of businesses in nearly every global industry is fueling significant expansion in the broadband services market. Key factors driving this growth include the rapid rise of e-commerce, the digitization of healthcare, increased consumption of online entertainment, and the growing implementation of e-governance by governments.
In the coming years, the growing presence of well-known and popular e-commerce companies in the country, coupled with technological innovation in the payment gateway landscape, might positively impact the e-commerce market by giving consumers a wide variety of products to purchase online and have them delivered to their address. The U.S. e-commerce market is expected to grow at a CAGR of 10.4% by 2033.
This has also led to online reviews gaining prominence. Online reputation is becoming very important for businesses, so review platforms have become an important gauge of what companies should do.
Against this backdrop, let’s compare two online review platform stocks to analyze which stock offers better investment potential: Yelp Inc. (YELP) and Tripadvisor, Inc. (TRIP).
The Case for Yelp Inc. Stock
With a $2.24 billion market cap, Yelp Inc. (YELP) operates a platform that connects consumers with local businesses in the United States and internationally. Its platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services.
On December 10, 2024, YELP announced its end-of-year product release featuring more than 20 new updates designed to enhance the user experience for consumers and business owners.
YELP also announced AI-powered improvements to the business owner experience with features like job summaries that help manage their inbox and a smart selection tool that automatically optimizes ad performance.
On November 26, 2024, YELP announced that it had completed its previously announced planned acquisition of RepairPal, an auto services platform, for approximately $80 million in cash, subject to customary post-closing adjustments.
YELP’s stock has plunged 2.5% over the past six months to close the last trading session at $34.09.
YELP’s 1.41x trailing-12-month asset turnover ratio is 187.5% higher than the 0.49x industry average. Also, its 13.51% trailing-12-month Return on Total Assets is 676.7% higher than the 1.74% industry average.
YELP’s net revenue for the fourth quarter, which ended on December 31, 2024, increased 5.7% year-over-year to $361.95 million. In addition, the company’s net income was $42.22 million, or $0.62 per share, up 54% and 67.6%, respectively.
For the first quarter ending March 2025, YELP’s revenue is expected to increase 5.9% year-over-year to $352.42 million. Its EPS for the ongoing quarter is expected to be $0.79. Moreover, the company surpassed EPS estimates in all the trailing four quarters, which is impressive.
YELP’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value and Quality and a B for Growth. YELP is ranked #4 out of 47 stocks in the A-rated Internet industry.
In addition to the POWR Ratings I’ve just highlighted, you can see YELP’s ratings for Momentum, Stability, and Sentiment here.
The Case for Tripadvisor, Inc. Stock
Valued at $2.03 billion by market cap, Tripadvisor, Inc. (TRIP) operates as an online travel company that primarily engages in the provision of travel guidance products and services worldwide. The company operates in three segments: Brand Tripadvisor; Viator; and TheFork.
On January 27, 2025, TRIP announced the launch of its first-ever Trendcast report, exploring the trends reshaping travel and predictions for the years ahead.
Shares of TRIP have surged 4.5% over the past three months but declined 16.6% over the past month to close the last trading session at $14.45.
In terms of the trailing-12-month CAPEX/Sales, TRIP’s 4.03% is 10.8% higher than the 3.64% industry average. However, its 6.70% trailing-12-month EBIT margin is 35.3% lower than the 10.36% industry average.
TRIP’s total revenue increased 5% year-over-year to $411 million for the fiscal 2024 fourth quarter that ended December 31, 2024. However, the company’s non-GAAP net income declined 22% year-over-year to $43 million, and its non-GAAP EPS declined 21% year-over-year to $0.30.
For the first quarter ending March 2025, TRIP’s revenue is expected to decline 1.7% year-over-year to $388.23 million. Its EPS for the ongoing quarter is expected to decrease 47.8% year-over-year to $0.06.
TRIP’s fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to Neutral in our proprietary rating system.
TRIP has a C grade for Momentum. It is ranked #10 in the same industry.
Click here for the additional POWR Ratings for TRIP (Growth, Value, Sentiment, Stability, and Quality).
Yelp Inc. (YELP) vs. Tripadvisor, Inc. (TRIP): Which Online Review Platform Offers Better Investment Potential?
As internet penetration rises, so does the global smartphone user population. This expanding user base increasingly engages with various e-commerce avenues, including digital content, financial services, travel and leisure, and e-tailing.
Leading online review companies YELP and TRIP stand to capitalize on the optimistic industry outlook. However, YELP’s strong profitability might make it the better online review platform stock pick.
Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Internet industry here.
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YELP shares were trading at $33.86 per share on Friday afternoon, down $0.23 (-0.67%). Year-to-date, YELP has declined -12.51%, versus a 0.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
Yelp Inc. (YELP) vs. TripAdvisor, Inc. (TRIP): Which Online Review Platform Offers Better Investment Potential? StockNews.com
