Maintaining an accurate and consistent online presence is crucial for businesses, but managing it manually can be overwhelming. Yext (YEXT) has emerged as a leader with its automation technology, exclusive partnerships, and AI-driven insights that streamline updates and boost visibility. In today’s FA Alpha Daily, we examine how Yext’s recent profitability and growth trajectory make it a standout opportunity for investors.
FA Alpha Daily
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Managing your online presence is crucial for businesses today. Ensuring that listings, descriptions, images, and reviews are up-to-date and consistent across platforms directly impacts visibility and customer trust.
While some businesses manage this manually, it’s often time-consuming and hard to scale, especially for those with multiple locations.
Others hire companies to handle it, but long-term maintenance and quick updates can be challenging.
Automation platforms like Yext (YEXT) streamline this process by distributing your information across a network of publishers, simplifying updates and monitoring.
The company stands out as a leading option for businesses with complex online needs.
Its network connects to over 200 publishers, including major platforms like Google, Amazon, Apple Maps, and Facebook.
This broad reach ensures that your business information is consistent and accessible across critical directories.
Yext also has exclusive partnerships with certain publishers, making it the only way to access specific listings.
Additionally, this exclusivity creates high switching costs. If you cancel your subscription, updates made through Yext often revert, which discourages customers from switching to competitors.
Furthermore, Yext is committed to embracing AI which powers the knowledge behind every customer engagement.
Its technology automates workflows at scale and delivers actionable cross-channel insights, enabling data-driven decisions.
From SEO and websites to social media and reputation management, Yext empowers brands to turn their digital presence into a differentiator.
Financially, the company has been showing growth. In its latest earnings report, it disclosed a 13% year-over-year revenue increase, surpassing analyst estimates.
Additionally, Yext’s acquisition of Hearsay Systems for $125 million is expected to add approximately $60 million in annual revenue, further strengthening its offerings and market position.
Despite all these factors, the market is concerned about the company’s profitability. On an as-reported basis, it is unprofitable, which is why the stock is very cheap.
However, Uniform Accounting reveals that it achieved profitability in 2024, a fact the market has yet to fully recognize.
Take a look…
The company has significantly improved its operations over the years, successfully crossing the chasm in 2024.
Looking ahead, it appears poised for even greater success. This is evident in the analysts’ expectations for the next two years.
Analysts expect the company’s Uniform return on assets ”ROA” to nearly double over the next two years, rising from 10% to 19%.
Yext’s extensive publisher network and high customer retention, driven by its exclusive partnerships, make it a reliable option for businesses looking to simplify online management.
Its recent financial performance indicates a positive trajectory, suggesting that the company is well-positioned to continue delivering value to both its clients and investors.
Best regards,
Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research
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