Yext Tumbles Over 15% On Disappointing Revenue Outlook

Yext stock plunged 15.4% in Wednesday’s extended trading session after the search-software provider issued revenue guidance for 1Q and FY22 that fell short of analysts’ expectations.

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Yext (YEXT) projects revenues in the range of $87-$89 million for 1Q, significantly lower than the consensus estimate of $93.9 million. For FY22, it forecasts sales between $375 million and $380 million, much lighter than Street’s expectations of $411 million.

Yext anticipates reporting a loss per share in the range of $0.05-$0.07 for 1Q and $0.17-$0.22 for FY22. The consensus estimate for the quarter and full-fiscal are pegged at a loss per share of $0.06 and $0.17, respectively.

While its outlook disappointed, Yext reported better-than-expected results for 4Q. Non-GAAP EPS was break-even, which compared favorably with the Street’s estimates of $0.08 loss per share as well as the year-ago quarter’s loss per share of $0.12. (See Yext stock analysis on TipRanks).

4Q revenue increased 13% to $92.2 million year-on-year and surpassed analysts’ projections of $89.1 million.

Following the earnings release, Berenberg Bank analyst Brett Knoblauch reiterated a Hold rating and price target of $16 (3% downside potential). In a note to investors, Knoblauch wrote, “We believe the share price reaction after-hours is warranted and we would expect shares and the multiple it trades on to continue to be pressured until there is more clarity regarding when normal business dynamics will return.”

Consensus among analysts is a Moderate Buy based on 1 Buy and 1 Hold. The average analyst price target of $18.50 implies upside potential of about 12% from current levels. Shares have gained around 14% over the past year.