A month has gone by since the last earnings report for Yelp (YELP Quick QuoteYELP - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Yelp due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. <p style="text-align: justify;"><strong>Yelp Q2 Results Rise Y/Y</strong></p><p style="text-align: justify;">Yelp reported second-quarter net income of 12 cents per share compared with 9 cents per share in the year-ago quarter. &nbsp;<br />&nbsp;&nbsp; &nbsp;<br />Net revenues increased 12% year over year to $235 million, which surpassed the Zacks Consensus Estimate of $232 million. The company&rsquo;s shift toward selling advertising plans without any fixed duration resulted in a robust increase in paying advertiser accounts, which drove results.<br /><br />Excluding Eat24, Nowait and Turnstyle, net revenues witnessed an increase of 22% year over year. Buoyed by the results, management increased its outlook for fiscal 2018.<br /><br /><strong>Top-Line Details</strong><br /><br />Advertising revenues (96% of total revenues) increased 21% year over year to $226 million, driven by an increase in local salesforce and transition to non-term advertising. Paying advertiser accounts are at 194K, up 31% year over year, which management mentioned to be the fastest in two years.<br /><br />Yelp is increasingly benefiting from its Home and Local services, which has been the key growth driver in the last reported quarter. Notably, 33% of the total advertising revenues were from this segment. Home &amp; Local category was mainly driven by revenues from &lsquo;Request-A-Quote&rsquo; which increased 50% sequentially.<br /><br />Transaction revenues plunged 81% year over year to $4 million due to the loss of revenues as a result of the sale of Eat24 to GrubHub in October 2017. In the second quarter, Eat24 contributed $17 million (94% of transaction revenues) in Transaction revenues. However, the plunge in Transaction revenues was partially offset by revenues earned from GrubHub for transactions originating on Yelp platform.<br /><br />Other services revenues soared 35% to $5 million, driven by growth of Yelp WiFi marketing platform and synergies from combining Yelp Reservations with Nowait sales team.<br /><br />In the second quarter, cumulative reviews rose 21% year over year to more than 163 million. App unique devices grew 15% year over year to 32 million on a monthly average basis. However, Mobile Website Unique Visitors declined 2.4% from the year-ago period to 72.3 million, while Desktop Unique Visitors fell 11% to 73.9 million.<br /><br /><strong>Operating Details</strong><br /><br />Sales and marketing (S&amp;M) expenses increased 15% year over year to $121 million, driven by expenses corresponding to increase in the number of sales employees from the year-ago period.<br /><br />Product development costs increased 25% to $53 million, driven by increasing investments in Yelp customer experience and supporting infrastructure and systems.<br /><br />General &amp; administrative (G&amp;A) expenses increased 6% to $29 million year over year, driven by increase in headcount and bad debt expense due to growth in ad revenues.<br /><br />Income from operations increased 6.5% from the year-ago period to $7.6 million. Operating margin of 3% remained flat on a year-over-year basis. Yelp reported adjusted EBITDA of $47 million, up 9% year over year, driven primarily by advertising revenue growth.<br /><br /><strong>Balance Sheet &amp; Cash Flow</strong><br /><br />Yelp exited the second quarter with $803 million in cash, investments &amp; marketable securities, down from $814.6 million at the end of the prior quarter. Net cash flow from operating activities in the first six months of 2018 was $60.9 million, compared with $76.3 million in the year-ago period.<br /><br />During the second quarter, the company repurchased nearly 771K shares at an aggregate price of $32 million. As of Jun 30, 2018, the company had $122 million remaining in its share repurchase program authorized in July 2017.<br /><br /><strong>Guidance</strong><br /><br />For the third quarter, Yelp expects revenues between $242 million and $246 million. Adjusted EBITDA is expected in the range of $49-$52 million.<br /><br />For fiscal 2018, net revenues are now anticipated to be in the range of $952-$967 million, compared with the earlier guided range of $943-$967 million. Adjusted EBITDA is expected between $186 million to $192 million, up from the earlier projection of $179-$188 million.</p><p style="text-align: justify;"><em>Note: The EPS data mentioned in the text of this section differs from the rest of report due to the difference in calculation or consideration of one-time items.</em></p>

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, Yelp has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Yelp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.