Yext (YEXT): Assessing Valuation After a Steady 30% Year-to-Date Share Price Climb

Yext (YEXT) has quietly outperformed many software peers this year, and that kind of steady climb usually means investors see something durable in the story, not just a passing sentiment shift.

See our latest analysis for Yext.

At a share price of $8.51, Yext’s steady year to date share price return of just over 30 percent and 1 year total shareholder return above 31 percent suggest momentum is still building as investors reassess its growth and profitability profile.

If Yext’s climb has you thinking more broadly about software and digital platforms, it could be a good moment to scout other high growth tech and AI names through high growth tech and AI stocks.

But with the shares still trading at a discount to analyst targets and some models flagging a meaningful intrinsic undervaluation, investors have to ask themselves: is this a fresh buying opportunity, or is the market already pricing in the next leg of growth?

Most Popular Narrative Narrative: 9.8% Undervalued

Compared to Yext's last close at $8.51, the most widely followed narrative sees only a modest upside in fair value, anchored in multi year earnings expansion.

Recent M&A activity and expansion into verticals like healthcare and financial services through AI powered platforms are opening up new, higher value enterprise use cases, which can drive higher average contract values and boost future revenue and gross margins via operating leverage.

Read the complete narrative.

Curious how steady, mid single digit growth can still justify a richer future earnings multiple and margin reset, all discounted at a specific hurdle rate? The narrative builds a tight chain from improving profitability to a re rated valuation multiple and a shrinking share count. Want to see exactly how those moving parts combine into the projected fair value, and what it assumes about Yext's earnings power a few years from now?

Result: Fair Value of $9.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent pricing pressure from low cost rivals and uncertainty around how quickly new AI products like Yext Scout monetize could easily derail this path.

Find out about the key risks to this Yext narrative.

Another Take: Multiples Paint a Richer Picture

While the narrative points to undervaluation on future earnings power, today’s price tag looks full when you zoom out. Yext trades on a P E of 39.6 times versus 32.4 times for the US software sector and a fair ratio of 27.6 times, implying limited room for multiple expansion if execution slips.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Yext Narrative

If this framework does not quite fit your view, or you prefer to dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.

A great starting point for your Yext research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Ready for more investment ideas?

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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.

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