Analysts Expect Breakeven For Yext, Inc. (NYSE:YEXT) Before Long
We feel now is a pretty good time to analyse Yext, Inc.'s (NYSE:YEXT) business as it appears the company may be on the cusp of a considerable accomplishment. Yext, Inc. organizes business facts to provide answers to consumer questions in North America and internationally. The US$1.2b market-cap company posted a loss in its most recent financial year of US$66m and a latest trailing-twelve-month loss of US$41m shrinking the gap between loss and breakeven. The most pressing concern for investors is Yext's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Yext
Consensus from 5 of the American Software analysts is that Yext is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$17m in 2026. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 67% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Yext's upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Yext has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of Yext which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Yext, take a look at Yext's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Valuation: What is Yext worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Yext is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Yext’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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