Yext stock is a buy, this analyst says

Yext (Yext Stock Quote, Chart, News, Analysts, Financials NYSE:YEXT) reported better-than-expected fiscal Q1 results and issued strong Q2 guidance, prompting Roth Capital Markets analyst Rohit Kulkarni to reiterate his “Buy” rating and $9.50 price target on June 4, citing an attractive risk/reward profile.

He said that growing traction in social media, new product momentum with Scout, and continued fragmentation in AI search are strengthening Yext’s position in the search and discovery space.

“We see upside in these new product offerings and view management’s execution in cost-efficient growth as a positive indicator for YEXT’s ability meet customer urgency in the rapid evolution of AI search applications,” he said. “At less than $7.00/ share, YEXT shares are trading at ~7.5x CY ‘25E EBITDA or 8.0x FCF. We see this valuation level as quite reasonable, and we would be incremental buyers on modest strength.”

Yext is a New York-based software company that provides a cloud platform for businesses to manage and sync their digital information across services like Google, Apple Maps, Facebook, and Yelp. Its subscription-based Yext Knowledge Engine includes tools for listings, web pages, and customer reviews. The company was founded in 2006.

He said that despite mixed fundamentals, Roth is maintaining a “Buy” rating because management remains optimistic about AI search fragmentation, which appears to offer growth potential that offsets ongoing macroeconomic concerns.

“Upsell opportunities, Yext Social expansion beyond financial services with its first healthcare customer, and new customers lining up on the waitlist for Scout indicate traction in initiatives from the past ~1 year,” Kulkarni said. “Structural tailwinds that are driving opportunity are as follows: (1) AI is accelerating search fragmentation and requiring brands to use a broader set of benchmarking tools, which YEXT has implemented frontier products to meet; (2) Strong free cash flow and new debt facility support continued M&A and opportunistic share repurchases, enabling further expansion of the product roadmap; (3) Core YEXT product remains stable, with growth driven by strong retention and increased bundling.”

Kulkarni expects Yext will generate $67-million in Adjusted EBITDA on $421.0-million in revenue for fiscal 2025. He projects those figures will improve to $105-million in EBITDA on $448.7-million in revenue in fiscal 2026.

“Our price target of $9.50 is based on 11.0x CY’ 25E EBITDA and implies ~2.5x CY ‘25E Revenue,” he said. “Impediments to our price target include a deeper-than-expected economic downturn, the departure of senior execs at the company, or heightened competitive pressure from large tech companies.”

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