Yext (NYSE:YEXT shareholders incur further losses as stock declines 8.3% this week, taking one-year losses to 41%

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in Yext, Inc. (NYSE:YEXT) have tasted that bitter downside in the last year, as the share price dropped 41%. That contrasts poorly with the market return of 30%. Even if you look out three years, the returns are still disappointing, with the share price down36% in that time. Shareholders have had an even rougher run lately, with the share price down 15% in the last 90 days.

After losing 8.3% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Yext

Yext isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last twelve months, Yext increased its revenue by 12%. While that may seem decent it isn't great considering the company is still making a loss. Given this fairly low revenue growth (and lack of profits), it's not particularly surprising to see the stock down 41% in a year. In a hot market it's easy to forget growth is the life-blood of a loss making company. So remember, if you buy a profitless company then you risk being a profitless investor.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth

This free interactive report on Yext's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Yext shareholders are down 41% for the year, but the broader market is up 30%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 11% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Yext better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Yext you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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.

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