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The company’s shares have declined 28.3% over the past six months against the 20.5% rally of the industry it belongs to and the 15.9% rise of the Zacks S&P 500 composite.
Based on the EV-to-EBITDA ratio, YEXT is currently trading at 22.84X compared with the industry’s 52.94X. If we look at the Price/Earnings ratio, the company shares currently trade at 12.15X forward earnings, below the industry’s 36.5X.
Top and Bottom Lines Remain in Good Shape
YEXT’s fiscal 2024 revenues amounted to $404.3 million, a slight increase on a year-over-year basis. The rise in the top line was driven by a combination of a rise in sales productivity and the ability to measure qualified pipelines to increase investment in direct revenue-generating roles.
The gross margin of 78.4% increased 430 basis points (bps) in fiscal 2024. Adjusted EBITDA amounted to $54.6 million, indicating a rise of more than 100% on a year-over-year basis. The adjusted EBITDA margin was 13.5% in fiscal 2024, up 950 bps year over year. The strong margin performance resulted from the optimization of the cost structure of the business.
Ease of Paying Off Short-Term Obligations
YEXT’s current ratio (a measure of liquidity) was 1.34 at the end of fourth-quarter fiscal 2024, higher than the year-ago quarter’s 1.19. A current ratio of more than 1 often indicates that a company will easily pay off its short-term obligations.
Sales & EPS Growth Prospects Weak for the Quarter
For first-quarter fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $96.4 million, indicating a 3.1% decline from the year-ago actual. The consensus estimate for earnings is pegged at 7 cents per share, implying a 12.5% decline from the year-ago reported figure.
For fiscal 2025, the Zacks Consensus Estimate for YEXT’s revenues is pegged at $400 million, suggesting a 1.1% decline on a year-over-year basis. The consensus estimate for earnings stands at 39 cents per share, implying 18.2% year-over-year growth.
To Conclude
YEXT may undergo a further correction as both top and bottom-line growth prospects do not look healthy for the first quarter fiscal 2025, and the company does not seem poised for an earnings beat in the quarter.
Per our quantitative model, the combination of two key elements — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of a positive earnings surprise. But that is not the case with YEXT, as it has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
Given this backdrop, it may not be a bad idea to wait for the stock to undergo further correction and offer a better entry point rather than rushing to purchase the stock before earnings.
EFX’s adjusted earnings (excluding 50 cents from non-recurring items) were $1.5 per share, beating the Zacks Consensus Estimate by 4.2% and increasing 4.9% from the year-ago quarter. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 6.7% from the year-ago quarter.
S&P Global Inc. (SPGI - Free Report) posted impressive first-quarter results.
SPGI’s adjusted EPS (excluding 85 cents from non-recurring items) of $4 surpassed the Zacks Consensus Estimate by 9% and increased 27.3% year over year. Revenues of $3.5 billion beat the consensus estimate by 2.9% and improved 10.5% year over year.
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Should You Buy Yext (YEXT) Shares Ahead of Its Q1 Earnings?
Yext (YEXT - Free Report) will report its first-quarter fiscal 2025 results on Jun 10, after market close.
Let us check out how YEXT has lately been doing.
Stock Trades at a Discount Relative to Industry
The company’s shares have declined 28.3% over the past six months against the 20.5% rally of the industry it belongs to and the 15.9% rise of the Zacks S&P 500 composite.
Based on the EV-to-EBITDA ratio, YEXT is currently trading at 22.84X compared with the industry’s 52.94X. If we look at the Price/Earnings ratio, the company shares currently trade at 12.15X forward earnings, below the industry’s 36.5X.
Top and Bottom Lines Remain in Good Shape
YEXT’s fiscal 2024 revenues amounted to $404.3 million, a slight increase on a year-over-year basis. The rise in the top line was driven by a combination of a rise in sales productivity and the ability to measure qualified pipelines to increase investment in direct revenue-generating roles.
Yext Revenue (TTM)
Yext revenue-ttm | Yext Quote
The gross margin of 78.4% increased 430 basis points (bps) in fiscal 2024. Adjusted EBITDA amounted to $54.6 million, indicating a rise of more than 100% on a year-over-year basis. The adjusted EBITDA margin was 13.5% in fiscal 2024, up 950 bps year over year. The strong margin performance resulted from the optimization of the cost structure of the business.
Ease of Paying Off Short-Term Obligations
YEXT’s current ratio (a measure of liquidity) was 1.34 at the end of fourth-quarter fiscal 2024, higher than the year-ago quarter’s 1.19. A current ratio of more than 1 often indicates that a company will easily pay off its short-term obligations.
Sales & EPS Growth Prospects Weak for the Quarter
For first-quarter fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $96.4 million, indicating a 3.1% decline from the year-ago actual. The consensus estimate for earnings is pegged at 7 cents per share, implying a 12.5% decline from the year-ago reported figure.
For fiscal 2025, the Zacks Consensus Estimate for YEXT’s revenues is pegged at $400 million, suggesting a 1.1% decline on a year-over-year basis. The consensus estimate for earnings stands at 39 cents per share, implying 18.2% year-over-year growth.
To Conclude
YEXT may undergo a further correction as both top and bottom-line growth prospects do not look healthy for the first quarter fiscal 2025, and the company does not seem poised for an earnings beat in the quarter.
Per our quantitative model, the combination of two key elements — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of a positive earnings surprise. But that is not the case with YEXT, as it has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Given this backdrop, it may not be a bad idea to wait for the stock to undergo further correction and offer a better entry point rather than rushing to purchase the stock before earnings.
Earnings Snapshot
Equifax Inc. (EFX - Free Report) reported mixed first-quarter 2024 results.
EFX’s adjusted earnings (excluding 50 cents from non-recurring items) were $1.5 per share, beating the Zacks Consensus Estimate by 4.2% and increasing 4.9% from the year-ago quarter. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 6.7% from the year-ago quarter.
S&P Global Inc. (SPGI - Free Report) posted impressive first-quarter results.
SPGI’s adjusted EPS (excluding 85 cents from non-recurring items) of $4 surpassed the Zacks Consensus Estimate by 9% and increased 27.3% year over year. Revenues of $3.5 billion beat the consensus estimate by 2.9% and improved 10.5% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.