YELP

Yelp is a no-growth-priced company that is, in fact, still growing profits and gushing cash. FY2025 revenue rose just 3.7% to $1.46B, but operating income jumped 22.2% to $185M and net income 9.6% to $146M — margins are widening (operating margin 12.6%, net 9.9%) even as the top line crawls. Operating cash flow surged 30.2% to $372M against only $48.4M of capex, leaving roughly $324M of free cash flow on a $1.47B market cap — a ~22% FCF yield. The balance sheet is pristine: $216M cash, total liabilities of $248M against $711M equity (0.35x liabilities/equity) and negligible long-term debt. ROE is a healthy 20.5%. At a P/E of 11 and P/S of 1.0, the market is pricing terminal decline, not a 20%-ROE cash compounder.

The capital-allocation engine is the core of the bull case. Management deployed $291M into buybacks in 2025 (nearly $2.0B cumulatively per the MD&A), shrinking diluted shares 8.5% year over year. That is why diluted EPS grew 19.1% to $2.24 — roughly double the net-income growth rate. With FCF comfortably funding the repurchases and headcount held flat while stock-based comp fell to 9% of revenue (sub-8% in December), each year of buybacks meaningfully lifts per-share value even if revenue barely moves. This is a textbook 'cheap, profitable, shrinking-share-count' setup.