Analysts Bullish After Yext Beats Q4 Expectations

Yext Inc YEXT reported solid fourth-quarter results Wednesday, with revenue and EPS ahead of consensus expectations. The company posted FY20 revenue guidance in-line with the Street, while its non-GAAP EPS came in below expectations.

The Analysts

Oppenheimer’s Koji Ikeda maintained an Outperform rating on Yext and raised the price target from $23 to $26. 

RBC Capital Markets' Mark Mahaney maintained an Outperform rating with an unchanged $26 price target. 

The Thesis

Yext reported fourth-quarter total revenue of $63.8 million, representing 33-percent year-on-year growth and beating the consensus estimate by around $1 million.

A PF EPS loss of 8 cents was a penny better than the consensus.

The technology company announced first-quarter total revenue and PF EPS guidance range of $66-$67 million and an 11-cent to 9-cent loss, in-line with expectations. FY20 guidance for total revenue was initiated at $295-$300 million, as widely expected. The full-year PF EPS guidance of a 44-40-cent loss was below the consensus estimate of a 38-cent loss.

Yext delivered a strong sales performance in the fourth-quarter, Oppenheimer’s Ikeda said in a Thursday note.

The company is “successfully defining and disrupting a large and underpenetrated Digital Knowledge Management opportunity” while maintaining a growth rate of around 30 percent, which should lead to robust results in upcoming quarters, the analyst said. 

RBC Capital Markets’ Mark Mahaney pointed out that Yext’s fundamentals were solid in the reported quarter, as the company generated strong revenue growth along with gross margin expansion of 90bps year-on-year. The company reached record high gross margins of 75.5 percent.

Price Action

Yext shares were rallying higher by 9.87 percent to $22.38 at the time of publication Thursday. 

Related Links:

Q4 Earnings Outlook For Yext

Earnings Scheduled For March 6, 2019

Photo courtesy of Yext.