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Yext, Inc. (NYSE:YEXT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Yext, Inc. organizes business facts to provide answers to consumer questions in North America and internationally. With the latest financial year loss of US$2.6m and a trailing-twelve-month loss of US$19m, the US$804m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Yext's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Yext
Consensus from 4 of the American Software analysts is that Yext is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$25m in 2026. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 60%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Yext's growth isn’t the focus of this broad overview, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Yext has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of Yext which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Yext, take a look at Yext's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
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Valuation: What is Yext worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Yext is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Yext’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.