Yext (YEXT) is gearing up to report its earnings this Thursday after the close, and ahead of this key date five-star RBC Capital analyst Mark Mahaney has reiterated his YEXT buy rating with an $18 price target (14% upside potential). Shares in the digital data manager are currently trading up 10% year-to-date.
Going into the print, Mahaney believes FQ1 estimates are reasonable, with an equal likelihood of upside vs. downside variance. “We also view Street assumptions for FQ2 as reasonable (20% Y/Y revenue growth, and $0.13 Non-GAAP EPS loss) and would expect YEXT to maintain its FY2021 Revenue and EPS guides” he says.
Specifically, the RBC analyst is forecasting FQ1 revenue of $86.3MM, above the Street at $84.3MM and in the middle of guidance ($85-$87M). His Adjusted EBITDA loss estimate of ($14MM) is below the Street at ($10.7MM), as is his Non-GAAP EPS loss estimate of ($0.14).
For Mahaney, key items to focus on include EBITDA margins, remaining performance obligations, net dollar retention and further insight into Yext’s Answers solution, which helps businesses handle more complex queries on their website. Notably Yext launched a free 90-day trial of Yext Answers in response to Covid-19 and has been seeing material traction, reports the analyst.
He notes that in FQ3, the company hit its target for quota-carrying sales reps of 250. “Coupled with the recent rollout of Answers, which brought in 29 deals for more than $1.5MM in new ACV in FQ4, top-line growth along with clear messaging around the continued execution around Answers will be of heightened importance” Mahaney told investors on May 29,
Overall, the analyst continues to see upside for Yext as it becomes an increasingly essential solution for businesses seeking to manage their digital information- and it seems the Street shares this bullish approach.
TipRanks shows that all four analysts covering the stock rate Yext a buy, giving it a firm Strong Buy consensus. The average analyst price target stands at $20 for upside potential of 28%. (See YEXT stock analysis on TipRanks).
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