7 Cheap Social Media Stocks to Invest In

3. Yelp Inc. (NYSE:YELP)

Forward P/E: 9.8

Analysts’ Upside Potential: 15.46%

Number of Hedge Fund Holders: 26

Yelp (NYSE:YELP) is a social platform that connects consumers with businesses. Its website and mobile app publish crowd-sourced reviews about businesses. It offers consumer-interactive tools and features to facilitate transactions between local businesses and consumers. The company’s advertising products allow businesses to reach a larger audience, irrespective of the size of their operations.

Businesses can drive conversion of their services while users can use the social platform to make well-informed decisions. It offers subscription services, licensing payments for access to Yelp data and other non-transaction, non-advertising arrangements. Yelp’s (NYSE:YELP) advertising products are sold online, through its website, through the Yelp for Business app, and indirectly through partners.

Yelp (NYSE:YELP) offers several free and paid advertising products to businesses of all sizes, including CPC Advertising (Yelp Ads) and Multi-location Ad Products. The company’s business page products include Upgrade Package, Free Business Account, Business Highlights, Branded Profile, Portfolio, Enhanced Profile, Yelp Connect, Logo, and Nearby Jobs.

Yelp (NYSE:YELP) delivered record net revenue and strong profitability in Q2 2024. It is continuing to leverage its product-led strategy to drive growth and profitability, especially in-home services and self-serve channels. Home services experienced a 15% year-over-year growth in Q2, while self-serve channels underwent a revenue increase of around 20% year over year, reaching record level.

The company is also continually updating its service products. Yelp Assistant, a new conversational AI feature, is a prominent example. Yelp Assistant makes finding and hiring service professionals considerably easier. The company also introduced the Yelp Fusion AI API, which brings Yelp’s trusted content to third-party platforms through natural language search. The revamped Yelp Guest Manager is another significant update, helping restaurants enhance efficiency, improve guest experiences, and seat more diners.

Despite challenges in the operating environment for retail, restaurants, and other businesses, Yelp (NYSE:YELP) has plans in place to build upon its strong momentum in services. It is focusing on executing against its robust product roadmap to deliver improved consumer experience and service pros. Yelp (NYSE:YELP) takes the third spot on our list of the 7 cheap social media stocks to invest in.