Yelp (YELP), which publishes crowd-sourced reviews about local businesses and has an online reservation service, has been struggling since reporting quarterly earnings last Thursday evening. Despite reporting a 13% increase in net revenues to $223M, investors are wary of the company's transition to more flexible, non-term advertising contracts. "We had a great start to 2018, accelerating advertising revenue growth and attracting a record number of new advertisers in the first quarter," said Yelp co-founder and CEO Jeremy Stoppelman. "The expansion of our non-term advertising product is showing promising results and we are raising our full-year revenue and adjusted EBITDA outlook."

IS MOMENTUM SUSTAINABLE? During its Q1 earnings call, Stoppelman elaborated on the non-term advertising product: "We've been rolling it out fairly methodically, sort of one office at a time, one team at a time, and feel very good about the transition progress thus far. It's also a big change. And so, as encouraged as we are, we continue to go through this change with a bit of caution about what we may see in the coming months. And what's reflected in our outlook for this year is a good quarter under our belt, in which the execution on that transition was really good, and continued caution about it because it is a different world for us."

ANALYST SAYS RESULTS/GUIDANCE UNINSPIRING: Piper Jaffray analyst Sam Kemp viewed Yelp's Q1 results and guidance as "uninspiring" in a note to investors out Friday The analyst continues to see Yelp as a "challenged model struggling to expand margins on the back of a heavy dependence on sales headcount." He believes the company faces "real competitive risks from internet giants and verticalized platforms. Kemp kept an Underweight rating on Yelp with a $36.50 price target. He said he believes current share levels represent a "lofty" valuation. Just recently, Alphabet's Google (GOOG, GOOGL) unveiled new features for its mapping software that will give more direct access to retail businesses and personalized features.

PRICE ACTION: Since its earnings report, Yelp shares are lower by 12.5% to $41.94 per share.