The annual results for Yext, Inc. (NYSE:YEXT) were released last week, making it a good time to revisit its performance. Yext reported revenues of US$299m, in line with expectations, but it unfortunately also reported (statutory) losses of US$1.09 per share, which were slightly larger than expected. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from Yext’s seven analysts is for revenues of US$380.0m in 2021, which would reflect a major 27% increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.18 on a statutory basis. Before this latest report, the consensus had been expecting revenues of US$380.7m and US$1.12 per share in losses. Although the revenue estimates have not really changed, we can see there’s been a earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target held steady at US$18.71, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company’s valuation. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Yext, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$13.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
In addition, we can look to Yext’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We can infer from the latest estimates that analysts are expecting a continuation of Yext’s historical trends, as next year’s forecast 27% revenue growth is roughly in line with 27% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it’s pretty clear that Yext is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – and our data does suggest that Yext’s revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Yext going out to 2025, and you can see them free on our platform here..
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