Yext

Yext does one boring thing well: it keeps a business's name, address, hours and product info synchronized across 200-plus discovery surfaces — Google Maps, Apple Maps, Bing, Yelp, Facebook, Alexa, ChatGPT search. If you have 4 000 dentist offices or 12 000 bank branches, Yext is the single source of truth that pushes every change in 60 seconds to every directory and AI search index that matters.

The market killed this stock for three reasons. First, the SEO-listings business was the original cash cow and it has stopped growing as Google de-emphasized third-party citations in favor of Google Business Profile. Second, the company acquired Hearsay Systems in 2024 (financial-advisor compliance-on-social-media SaaS) and the market hated paying 4x revenue for it. Third, generative AI seemingly threatens the entire premise — if ChatGPT answers questions about a business directly, who needs Yext?

The third fear is exactly backwards. The AI search era makes Yext more important, not less. When an LLM pulls business info to answer a query, it pulls from the structured-data layer that Yext literally feeds. The company has signed early deals with both OpenAI and Perplexity to be a verified data provider. That is the bull thesis the market is not paying for at all.

Hestia Capital Partners (small-cap activist) ran a proxy fight in 2023 and now has 2 board seats — they pushed for cost cuts that took GAAP loss to near break-even. Engine Capital also has a position. No mega-fund 13F whale. Insider ownership ~5 percent, CEO Michael Walrath (former AppNexus founder) bought stock on the open market in late 2024.

At $3.46 with $0.07 trailing EPS, the trailing P/E looks awful, but forward P/E on consensus $0.70 forward EPS is 4.9 — pricing in almost no growth recovery. EV/EBITDA 18.6 is more demanding given net cash is small. The market is saying enterprise SaaS at 1x sales with no growth.

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I find Yext interesting precisely because the market is conflating two things: a slowly declining legacy product and a brand-new AI-search distribution franchise. If the AI piece is worth even $200M alone, the rest of the company is free at $3.46. The risk is that the legacy product declines faster than the new opportunity scales — possible, but the management cost discipline since 2023 is real. I would size 1 to 2 percent and let the AI-deal flow unfold over four to six quarters. It is a venture-bet inside a public small cap, not a value compounder.