Yelp surprised analysts today during its first hours of trading as a public company.
As the Seattle PI puts it, the user-review company's shares soared by as much as 60 percent in early trading. The stock opened at $22.01 a share and has hit a high of $25.10.
"Analysts were bearish on the stock's prospects because the company has never made a profit since its founding eight years ago," the PI reports. "But investors seem keen on the stock, at least so far this morning."
The Wall Street Journal goes with a tech metaphor saying Yelp got a "five-star review" from investors. The Journal also adds some caution:
"Analysts said demand appeared strong for Yelp during its roadshow, but cautioned that any first-day pop might not be sustainable. Several other companies that have social media-based businesses, such as Groupon Inc. and Angie's List Inc., declined after their debuts. Groupon, which rose nearly 31% on its first day of trading in November, was still trading below its IPO price Friday, while Angie's List was faring better, at $16.27, just a hair ahead of its first-day close of $16.26, which was a gain of 25%.
"One advantage for investors in Yelp's case is the fact that it has a publicly traded peer—Angie's List—that can be used as a comparison. Angie's List is currently trading at about 7.9 times total enterprise value to revenue, while Yelp is around 10.55, according to Larry Levine, an appraiser and certified public accountant who is a managing director at McGladrey & Pullen's financial advisory service."
MSNBC digs a bit into the company's finances saying that in 2011, Yelp saw an operating loss of $16.2 million and had a of revenue of $82.3 million.
"In its registration document for an IPO, Yelp said the company does not 'expect to be profitable in the near term as we continue to invest in our future growth,'" MSNBC reports.
Update at 4:19 p.m. ET. Ends On A High Note:
The Yelp stock closed at 24.58, close to 64 percent above its initial offering price.