YEXT - Yext: Continued ARR Erosion Is A Major Red Flag (Rating Downgrade)

2024-06-18 10:00:55 ET

Summary

• Yext is struggling to retain clients and show growth, which has led to a tremendous share price decline.
• The company's recent decision to acquire Hearsay Systems, while simultaneously laying off 12% of its own staff, may lead to confusion and not produce margin gains.
• YEXT stock is trading cheaply at ~6x adjusted EBITDA, but there are too many risks here to bank on this stock. Downgrading to sell.

Once a company is in the penalty box, it's difficult to get out. Yext ( YEXT ) has been in this position for years: the customer engagement data platform has been struggling to hold on to its client base and prove that it has a path to return to growth....

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