Photo courtesy of Yelp. 

The online review platform Yelp Inc (YELP) reported first-quarter results Thursday that were roughly in-line with estimates, but second-quarter guidance fell short of expectations.

The Analysts

Aegis Capital's Victor Anthony maintained a Sell rating on Yelp with an unchanged $29 price target.

KeyBanc Capital Markets' Andy Hargreaves maintained a Sector Weight rating. 

Aegis: Weakening Fundamentals

Yelp's first-quarter revenue matched expectations and adjusted EBITDA slightly beat estimates, Anthony said in a Friday note. 

Digging beyond the headline numbers, there are some signs that the company's core fundamentals continue to weaken, the analyst said.  

The core local advertising segment showed a deceleration in revenue growth for the third straight quarter, and average revenue per user growth slowed for the fifth straight quarter.

The Request-A-Quote feature posted 50-percent year-over-year revenue growth, but the annualized revenue rate fell for the second straight quarter, Anthony said.

Yelp's guidance for 2019 transactions revenue of $15 million and other services revenue of $29 million suggests the local advertising business is growing revenue at 7-9 percent, which is shy of the company's total growth guidance of 8-10 percent, according to Aegis. 

Yelp continues to show a core business that remains challenged, which justifies a bearish stance on the stock, Anthony said. 

KeyBanc: Aggressive Long-Term Guidance

Yelp's first-quarter report shows ad revenue growth decelerated to 6 percent year-over-year, but management's second-quarter guidance looks conservative, Hargreaves said in a Thursday note. The company's momentum with multilocation and national advertising accounts — coupled with a growing salesforce — could result in a limited acceleration of growth in the back half of 2019 and implies the potential for upside, the analyst said. 

Yet beyond this year, a sustainable mid-teens growth rate through 2023 and significant margin expansion both remain "unlikely," Hargreaves said. 

The company's longer-term guidance is "highly optimistic" but balanced by new product initiatives and a share buyback program, he said.

Price Action

Yelp shares were down 15.8 percent at $33.47 at the time of publication Friday.