Yext (NYSE:YEXT) is a small company with a small following, but its stock is going up today after gaining some analyst attention. William Blair initiated coverage on Yext with an outperform rating. Take note that "initiate" means this analyst hadn't previously issued an opinion, underscoring how little attention Yext typically gets.
As of 11:00 a.m. EDT, Yext stock was up 7% and reaching new highs for 2020.
Yext describes itself as a "search experience cloud company." Its cloud-based software helps improve search data. It partners with companies to ensure people have access to official facts. After all, with the sheer amount of information on the internet, there's plenty of inaccurate or outdated data for people to access when they search for answers.
During the COVID-19 pandemic, Yext was as busy as ever. Local governments and even the World Health Organization employed the small technology company to make sure concerned citizens would have their coronavirus questions answered accurately. Restaurants even found use for Yext during the pandemic. With more people ordering digitally, there was a need for verified menus. To meet the need, Yext partnered with Olo, a restaurant ordering platform used by many top restaurant chains.
For the first quarter of fiscal 2021, Yext's revenue increased 24% year over year to $85.4 million. Its customers increased to 2,100 -- good for 36% growth. It's important to note the fiscal quarter ran until the end of April, so it includes a time during which other companies were severely affected by the coronavirus. Yext delivered solid numbers in a challenging economic climate.
By starting coverage of Yext, William Blair is likely getting many people to notice the company for the first time. It's a vote of confidence, and one that investors are understandably excited about today.
But Yext isn't getting noticed only by Wall Street. Technology giant Adobe also recently recognized Yext for its software solution called Yext Answers. It's added Yext as a premier partner on Adobe Exchange. That's a level of visibility that should gain the company more customers, something that will drive more value than any analyst opinion.