We feel now is a pretty good time to analyse Yext, Inc.'s (NYSE:YEXT) business as it appears the company may be on the cusp of a considerable accomplishment. Yext, Inc. organizes business facts to provide answers to consumer questions in North America and internationally. The company's loss has recently broadened since it announced a US$2.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$6.0m, moving it further away from breakeven. As path to profitability is the topic on Yext's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 4 industry analysts covering Yext, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$2.4m in 2025. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 49%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Yext given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one aspect worth mentioning. Yext currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Yext which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Yext, take a look at Yext's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Yext worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Yext is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Yext's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com