Yelp stock falls after Piper Jaffray downgrades to underweight

Yelp Inc. shares dropped 3.5% in premarket trade Thursday after Piper Jaffray downgraded the stock to underweight from neutral and expressed concern about competition from Alphabet Inc.'s Google and Facebook Inc. . "We believe Yelp's strategic value is declining alongside the relative importance of long-form reviews as consumers increasingly depend on short-form information from social, search and maps for local businesses," Piper Jaffray's Sam Kemp wrote. He added that Facebook and Google have both made improving their local products a priority. Kemp questions Yelp's decision to "impair" the mobile web experience in order to draw more people to the Yelp app and sees "no signs of improving sales productivity." He lowered his price target from $38 to $37. Yelp shares have gained 9.8% so far in 2017, compared with a 17.4% gain for the S&P 500 Index .

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