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Once a company is in the penalty box, it's difficult to get out. Yext (NYSE:YEXT) has been in this position for years: the customer engagement data platform has been struggling to hold on to its client base and
Yext: Continued ARR Erosion Is A Major Red Flag (Rating Downgrade)
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.
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.
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