Yext Posts Smaller-than-Feared Quarterly Loss, Shares Soar 18%

Yext Inc (YEXT) reported a smaller-than-expected loss in the fiscal first quarter of 2022. Sales also surpassed analysts’ expectations of $88.55 million. The company’s shares rose almost 18% to close at $14.47 on May 28.

Yext is a technology company that offers brand updates using its cloud-based network of apps, search engines, and other facilities.

The company incurred a loss of $0.02 per share in Q1, compared to the $0.06 loss per share estimated by analysts. A loss of $0.10 per share was reported in the same quarter last year.

Revenue generated in the quarter was $92 million, which grew 8% from the year-ago period.

Yext CEO Howard Lerman said, “We continue to grow revenue while increasing our business efficiencies and cash position. We are now expanding our search platform to include support search, and have an incredible roadmap that will allow us to deliver AI search everywhere across the enterprise. Our team is energized, and we’re in a great position as the world begins to reopen.” (See Yext stock analysis on TipRanks)

For the fiscal second quarter, revenue is expected to be in the range of $94 – $96 million, versus the consensus estimate of $92.96 million. Adjusted net loss per share is projected to be $0.09 to $0.07, versus a loss of $0.05 estimated by analysts.

For Fiscal 2022, the company expects revenue to land in the range of $381 million – $386 million. The consensus estimate is pegged at $377.75 million. Adjusted net loss is projected to be in the range of $0.22 – $0.17 per share. Analysts have forecast the loss of $0.16 per share.

Following the fiscal first-quarter earnings announcement, Needham analyst Ryan MacDonald reiterated a Buy rating and a price target of $18 (24.4% upside potential) on Yext.

MacDonald commented, “While investors anticipated the launch of the new Support Answers offering, which came earlier this week, Yext was also quite busy behind the scenes introducing the new functionality to customers in 1Q. This work resulted in two net new logos in Samsung and Focus Brands, and two sizable upsells with Altice and ASDA. Additionally, Listings appears to have stabilized, with NRR troughing in February. When combining this with the additional functionality set to launch later in FY22, we expect Answers to drive healthy bookings growth in FY22 and a reacceleration of revenue growth in FY23.”

Overall, the stock has a Hold consensus rating based on 2 Buys, 2 Holds, and 1 Sell. The average analyst price target of $15.75 implies almost 8.9% upside potential from current levels. Shares have decreased 13.1% over the past year.

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