Enterprise artificial intelligence (AI) search platform provider Yext (NYSE:YEXT) stock has been grinding lower towards the pandemic lows. The Company integrates AI to provide answers for customer inquiries utilizing search and voice assistants.
The Yext knowledge platform is connected to many familiar brands including Amazon (NASDAQ:AMZN) Alexa, Microsoft (NASDAQ:MSFT) Bing, Facebook (NASDAQ:FB), Yelp (NYSE:YELP) and Google (NASDAQ:GOOGL). The Company is integrating more features including Yext Answers and Yext Agent which enables company site search and answers through internal portals. Prudent investors seeking exposure in enterprise AI search can watch for opportunistic pullback levels in shares of Yext.
Fiscal Q3 2021 Earnings Release
On Dec. 2, 2021, Yext released its fiscal third-quarter 2021 results for the quarter ended October 2021. The Company reported an earnings-per-share (EPS) loss of (-$0.04) versus a loss of (-$0.07) consensus analyst estimates, a $0.03 beat. Revenues grew 11.7% year-over-year (YoY) to $99.50 million, beating analyst estimates for $98.21 million. Yext CEO Howard Lerman commented:
"We are on the road to recovery. The solid results we delivered in the third quarter reflect strong execution against our growth plans. Answers is growing quickly, our Listings business is recovering, and our land-and-expand sales strategy is working. That, coupled with new growth vectors yet to tap, make us optimistic about the future."
Mixed Guidance
Yext raised fiscal full-year 2022 revenue guidance in line coming in between $389.70 million to $391.7 million versus $5387.42 million consensus analyst estimates. The Company sees fiscal full-year 2022 EPS between (-$0.22) to (-$0.20) versus (-$0.22) consensus analyst estimates.
Conference Call Takeaways
CEO Lerman set the tone:
“This quarter makes us optimistic about the future. We're seeing positive signs that our listings business is beginning to recover. Answers is growing. Our land and expand sales strategy is coming together, Europe's growth is reaccelerating, and we still get many new growth vectors to tap. Let me start with Listings. Listings ARR bottomed out at 1% growth year-over-year in Q4 of last year and has since reaccelerated to 5% year-over-year growth most recently in Q3. While Listings is showing signs of recovery, Answers is growing quickly. Answers has sustained triple-digit ARR growth exceeding 130% on a year-over-year basis for the past 12 months and is now a significant portion of our incremental ARR mix. And we are landing and successfully expanding several leading global brands, all of whom landed with a small footprint in Listings or Answers now have an ARR base with millions of dollars of ARR as they expanded with a deeper foothold across the platform. And so for example, a large telco, we landed in Q1 fiscal 2016 for just a couple of hundred thousand dollars in ARR has increased over 11x to an ARR base of more than $3 million as of the third quarter this year by expanding across our AR search platform with more products and solutions. With more products and solutions to sell and demand from our clients' recovery, sales productivity of ramped reps in our direct channels has increased over 50% year-to-date compared to last year. Europe. Europe grew ARR in excess of 30% year-over-year during the third quarter. Renewals. Renewals in financial services and health care were strong this quarter, and we're starting to see some industries impacted by the pandemic return such as retail, restaurants, and luxury brands. This quarter's renewals included Dolce & Gabbana, Krispy Kreme, P.F. Chang's, Topgolf; and fashion brand, YSL. The data from the third quarter suggests that we've reached the bottom in Q4 last year, and we are on the road to resuming our pre-pandemic state."
He concluded:
“We will continue to innovate and create unique solutions for our customers and partners every quarter, and we're bringing new AI search ideas and product categories to our customers, driving further upside to our plans. I'll highlight just a few. First, product listings. There for products, what location listings are for physical locations. For example, many cosmetics originated on revlon.com but the product content for makeup items, beauty tools and hair products, must also end up on dozens of e-commerce sites. Content like pictures, product specifications, prices and more must be synced from a single source of truth across multiple endpoints, which is the exact same problem we solved for Locations. Product listings is an area, a new area where we are well-positioned to enter and compete. Let's talk about chat and guided search. The rising in popularity and our ability to answer questions completely free form is the perfect overlay for existing chat offerings that blend the best of natural language understanding, which we do with future workflow, which we plan to develop. Based on the knowledge graph powering conversational AI, search, listings, and everything from one spot, we see a huge opportunity to compete in this market. Finally, workplace answers or what others call enterprise search behind the firewall is one of the most commonly requested features from our customers, and we're building the scale, connectors, and security features to enter this market. With this level of innovation, we are well positioned for the future. I've never been more confident in our vision.”
YEXT Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for YEXT stock. The weekly rifle chart peaked on its latest bounce attempt at the $10.70 Fibonacci (fib) level. The weekly rifle chart formed an inverse pup breakdown with the 5-period moving average(MA) falling at $9.86. The weekly stochastic crossed back down towards the 20-band. The weekly lower Bollinger Bands (BBs) sit at $7.95. The daily rifle chart formed an inverse pup breakdown on the $10.51 market structure high (MSH) sell trigger. The daily market structure low (MSL) buy triggers on a breakout through $9.50. The daily 5-period MA stalled at $9.16 as 15-period MA continues to slip at $9.67. The daily lower BBs sit at $8.24. The daily stochastic coiled through the 20-band but is stalling setting up a daily make or break. Prudent investors can monitor for opportunistic pullback levels at the $8.32 fib, $7.56 fib, $6.79 fib, and the $5.91 fib level. Upside trajectories range from the $11.21 fib up towards the $14.63 fib level.