Yext
stock was tumbling Thursday in yet another sign that investors are taking a more skeptical line on the prospects of artificial intelligence boosting a wide range of stocks.
Yext
(ticker: YEXT) was down 23% at $6.98 after its latest earnings report. The stock had been up 39% this year through to the close of trading Wednesday, and it has dropped from heights of more than $13 earlier this year.
It’s a strong reaction considering
Yext
largely met or slightly topped analysts’ expectations for its results and raised its guidance. However, in-line results and revenue growth of 2% from the prior year underwhelmed considering the excitement around AI.
Investors look to be becoming pickier about which AI-related stocks to back. Yext specializes in helping businesses improve their online search performance and is integrating AI technology. But it’s still struggling to return to historic growth rates. Yext wasn’t the only AI-hyped stock being punished on Thursday as
C3.ai
(AI) dropped 10% in premarket trading after withdrawing its profit forecast.
D.A. Davidson analyst Tom White raised his target price on Yext stock to $11.50 from $10 but kept a Neutral rating.
“We remain Neutral-rated for the time-being given the still early-stage of Yext’s turn-around and the fluid macro backdrop as it relates to enterprise spending,” White wrote.
Yext reported second-quarter adjusted earnings of 7 cents a share, compared with a loss of 3 cents for the same period a year earlier and matching analysts’ expectations. Revenue rose to $102.6 million from $100.9 million a year earlier, ahead of analysts’ forecasts of $102 million.
Yext said that for the third quarter it expects adjusted earnings of between 6 and 7 cents a share on revenue of $101.5 million to $102.5 million. For the year overall, it expects adjusted earnings of 29 cents to 30 cents a share on revenue of $405 million to $407 million.
Write to Adam Clark at [email protected]
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