Since late November of 2018, shares of Yelp (NASDAQ:YELP) have been on a torrid run higher as investors have expressed confidence in the digital rating platform’s ability to sustain healthy ad revenue growth and robust margin expansion. That lit he fire under Yelp stock.

Fourth quarter numbers, released in mid-February, affirmed that both of those things are still happening. That report also included a five-year outlook which implied that both revenues and margins will keep trending higher for a lot longer.

Net result? Yelp  is up more than 30% since late November.

Some investors think there’s another 30%-plus rally just around the corner. There’s not. The grim reality is the narrative and numbers behind Yelp stock don’t look that good. Even under bullish assumptions that management hits its aggressive long term targets (which looks unlikely), further upside in Yelp looks limited here.

In the much more realistic scenario that Yelp doesn’t hit those five year targets, Yelp stock looks overvalued here.

As such, Yelp stock is anywhere from fully valued to overvalued here. That means it’s time to sell. This multi-month rally in Yelp stock is on its last legs. The next big move will likely be lower.

The Narrative Has More Questions Than Answers

Yelp is a cool platform. The ability to rate, discover, and book events is exceptionally useful for consumers. It’s also useful for businesses that want to grow their reach.

But, there are also problems with the Yelp platform. First, the group of core “Yelpers”, or the group of individuals that consistently leave reviews on Yelp, is niche. In the fourth quarter, there were 6.5 million new reviews on Yelp. Between app, mobile web, and desktop visitors, Yelp averaged nearly 165 million visitors.

Assuming each one of those new reviews was from a unique person, then only 4% of Yelp visitors in the fourth quarter left a review. In reality, we know that “Yelpers” usually leave multiple reviews, so the percentage of the Yelp visitor community leaving reviews is likely somewhere well below 2%.

That is incredibly niche. An incredibly niche reviewer pool means that the results of reviews will be incredibly niche, too. They won’t represent the mass opinion. Thus, Yelp’s functionality as an authentic reviews platform is limited by its lack of reviewers.

Also, Yelp has challenges when it comes to its business model. Yelp makes money off ads. That means they make money by promoting places to consumers. This inherently creates a conflict of interest for the business as a reviews platform.

Yelp isn’t incentivized to surface the best results all the time. Rather, they are incentivized to surface whichever advertising account is paying them most (the first three results on my most recent Yelp search were ads). Thus, Yelp’s functionality as an authentic reviews platform is further limited by a misaligned financial incentive structure.

Last, but not least, there is no reason a Google (NASDAQ:GOOG), Facebook (NASDAQ:FB), or Amazon (NASDAQ:AMZN) can’t do reviews better given broader reach. Indeed, they are trying to. This is a major operational risk for the company going forward.

Overall, the narrative here just isn’t that good. From where I sit, Yelp has some serious challenges which will likely keep this company from growing much in the long run.

The Numbers Aren’t Good

The numbers aren’t good here, either, and they support a bearish skewing narrative.

Over the past several years, revenue growth has slowed from 30% to 19% to 11%. Revenue growth is expected to drop to below 10% next year. App Unique Device growth was 20% heading into 2018.

Exiting the year, App Unique Device growth is below 15%. Cumulative review growth has followed a similar slowing trend, dropping from 23% in the year ago quarter, to under 20% last quarter. Paying advertiser account growth has slowed, too, and the number of paying advertiser accounts actually dropped sequentially last quarter.

In other words, the numbers here say three things: the number of people using Yelp is maxing out, review engagement rates are dropping, and advertisers aren’t too interested in the platform. Broadly speaking, that translates into slower revenue growth, which is exactly what you’re seeing.

Yelp’s new long term outlook calls for a sharp upswing in revenue growth rates from sub-10% this year, to mid-teens over the next several years. That’s an aggressive outlook, especially considering revenue growth has done nothing but slow for several years.

Meanwhile, management also expects adjusted EBITDA margins to rise to above 30%. Again, that seems aggressive, considering adjusted EBITDA margins above 20% have been historically unattainable for this company.

Nonetheless, even if you assume mid-teens revenue growth and 30% EBITDA margins by fiscal 2025, a best-case scenario for EPS by then is right around $3.50. Based on a growth average 20 forward multiple, that implies a fiscal 2024 price target for Yelp stock of $70. Discounted back by 10% per year, that equates to a fiscal 2019 price target in the lower $40’s.

We are still 12 months out from the end of fiscal 2019, and Yelp stock is already nearing the lower $40’s.

Thus, upside in a best case scenario is limited. Under more realistic growth assumptions, Yelp is simply overvalued here.

Bottom Line on YELP Stock

Yelp faces long running structural and operational challenges which will likely limit reach and growth. Assuming that slower is the new normal for Yelp (and that management’s long term outlook is far too aggressive), Yelp stock looks out over its skis here.

The next move in this stock will likely be lower.

As of this writing, Luke Lango was long GOOG, AMZN, and FB.