Market cap

Yext (NYSE: YEXT) Adds US $ 69 Million To Market Cap In Past 7 Days, Though Investors From Three Years Ago Still Down 31%


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In order to justify the effort of selecting individual stocks, it is worth striving to beat the returns of a market index fund. But in any portfolio, there will likely be stocks below that benchmark. We regret to report that in the long term Yext, Inc. Shareholders of (NYSE: YEXT) had this experience, with the stock price falling 31% in three years, compared to a market return of around 83%. And the ride hasn’t been smoother lately over the past year, with a price tag 27% lower at that time.

The recent 4.5% rise could be a positive sign of things to come, so let’s take a hard look at historical fundamentals.

Yext is currently unprofitable, so most analysts would look to revenue growth to get a feel for how fast the underlying business is growing. When a business is not making a profit, we generally expect good revenue growth. Indeed, rapid income growth can be easily extrapolated to expected profits, often of considerable size.

In three years, Yext has increased its revenue by 21% per year. This is way above most other nonprofits. As its turnover increased, the share price fell by 10% per year. This seems to be an unfortunate result for the incumbents. It seems likely that real growth has fallen short of shareholder expectations. Before considering a purchase, investors should consider how quickly expenses increase relative to income.

The company’s revenue and profits (over time) are shown in the image below (click to see exact numbers).

NYSE: YEXT Profit and Revenue Growth October 27, 2021

If you are thinking of buying or selling Yext shares, you should check this out FREE detailed report on its balance sheet.

A different perspective

The past twelve months have not been good for Yext shares, which cost holders 27% as the market was up about 35%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The 10% loss per year over three years is not as bad as the past twelve months, suggesting the company has not been able to convince the market that it has solved its problems. Although Baron Rothschild once said to “buy when there is blood on the streets, even if the blood is yours”, he also focuses on high quality stocks with a solid outlook. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Even so, know that Yext is displayed 3 warning signs in our investment analysis , you must know…

For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the US stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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