Markets rewarded Yelp (YELP) and Ubiquiti (NYSE:UI) in a big way after the companies reported quarterly earnings that easily beat expectations.
Yelp reported revenue growing 9% to $262.5 million in Q3. National clients led the strength. More clicks and lower cost per clicks were a pair of trends that lifted profits. The site is clearly gaining momentum, confirmed by a Q4 guidance raise. Yelp sees revenue growing 11-14% and EBITDA margins adding 2-3 points Y/Y.
In recent weeks, rumors over Yelp buying Groupon (NASDAQ:GRPN), which reported a weak quarter, hurt the stock. This deal seems unlikely. Look for CAGR for revenue through to 2023 supporting a higher stock price.
Wireless network gear supplier Ubiquiti reported an EPS of $0.16. Revenue grew 14.3% to $323.3 million. UI stock rose an incredible 35% on the day of the report because markets expected weak results. But the turnaround from last quarter’s weak period is enough to win back investors.
Ubiquiti is a high-quality company that continues to emphasize its spending on R&D and less so on marketing. That grows profits steadily. And though growth is not as fast as markets like, the long-term prospects keep improving.
