What Happened:
Shares of online reputation and search platform Yext (NYSE:YEXT) jumped 12.9% in the morning session after Reuters reported that the company is exploring a sale after attracting takeover interest. The sources also cautioned that the company may not proceed with any deal.
Is now the time to buy Yext? Access our full analysis report here, it's free.
What is the market telling us:
Yext's shares are somewhat volatile and over the last year have had 14 moves greater than 5%. But moves this big are very rare even for Yext and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 24.2% on the news that the company reported fourth-quarter results with revenue exceeding expectations by a narrow margin, though EPS came in well ahead of Wall Street's estimates. Yext produced $14.8 million of adjusted EBITDA (vs estimates of $12.6 million), partly thanks to a huge year-on-year increase in its gross margin, which expanded from 74% to 78.6% thanks to the company's shift to a professional services strategy. This encouraging gross margin expansion trumped its underwhelming full-year revenue guidance, which was below expectations. A reason for the lower revenue guidance was the loss of a large customer during the quarter, but the market didn't seem to care. Overall, it was a decent quarter for Yext.
Yext is down 11% since the beginning of the year, and at $5.17 per share it is trading 62.1% below its 52-week high of $13.65 from June 2023. Investors who bought $1,000 worth of Yext's shares 5 years ago would now be looking at an investment worth $280.37.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.