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Pro Analysis

Buy Yelp on 'request a quote' feature: SunTrust

The Yelp logo is displayed in the window of a restaurant in New York.
Scott Eells | Bloomberg | Getty Images
The Yelp logo is displayed in the window of a restaurant in New York.

Investors should buy Yelp shares on the large profit potential of the company's new lead generation feature for small businesses, according to SunTrust Robinson Humphrey, which reiterated its buy rating.

"We believe Yelp management is considering models (lead-gen, subscription upsell, hybrid, other) for eventual monetization of RAQ [request-a-quote]," Suntrust analyst Matthew Thornton wrote in a note to clients Thursday. "Based on analysis of several leadgen platforms, we believe RAQ could drive a double-digit lift in revenue and EBITDA (we assume monetization in '18)."

Yelp's "request a quote" site tool allows a consumer to request a price quote from a service provider such as a plumber. The company is currently not monetizing the feature.