Yelp Inc YELP reported third-quarter results that "solidly" beat expectations and investors should be positive on the stock, according to RBC Capital Markets.

The Analyst: Mark Mahaney upgraded Yelp's stock from Sector Perform to Outperform with a $29 price target.

The Thesis: Yelp's total third-quarter revenue of $221 million and Ad revenue of $212 million beat RBC's expectations of $200 million and $194 million, respectively. Also, Self-serve and Home & Local showed positive year-over-year growth while Paying Advertising locations notably improved by 130,000 quarter-over-quarter.

Total EBITDA of $52.7 million was also "well above" the Street's estimate of $11 million.

"We are starting to see the impact of early signs of recovery and reopening of the economy on Yelp's business," the analyst wrote in a note.

Related Link: Why These Companies Could Benefit From Google's Antitrust Lawsuit

Yelp is also considered a "vaccine stock" which means the company will notably benefit from the release of a COVID-19 vaccine as foot traffic for businesses on its platform picks up.

Finally, Yelp's stock is down 36% since the start of 2020 versus the Nasdaq's index that is up 32.5% over the same time period. While the underperformance may be justified given a notable revenue decline in the second quarter, the "worst is behind" Yelp.

YELP Price Action: Yelp's stock traded higher by 7.7% to $23.71 at publication time.

Photo credit: Nan Palmero, Flickr