NEW YORK, June 17, 2022 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against Yext, Inc. (“Yext” or the “Company”) (NYSE: YEXT) and certain of its former officers. The class action, filed in United States District Court for the Southern District of New Yorkand registered under number 22-cv-05127, is on behalf of a class consisting of all persons and entities other than defendants who purchased or otherwise acquired Yext securities between March 4, 2021 and March 8, 2022both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of federal securities laws and to pursue remedies under Sections 10(b) and 20(a). ) of the Securities Exchange Act of 1934 (the “Exchange Act”) and rule 10b-5 promulgated thereunder, against the Company and certain of its principal officers.
If you are a shareholder who purchased or otherwise acquired Yext securities during the Class Period, you have until August 16, 2022 ask the court to name you as the lead plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those making inquiries by e-mail are encouraged to include their mailing address, phone number and number of shares purchased.
Yext organizes a company’s facts to provide answers to online consumer questions. The Company operates the Yext Platform, a cloud-based platform that enables its customers to, among other things, provide answers to consumer questions, fact checks about their business and the content of their landing pages. , and manage their consumer reviews. Yext’s website describes its service as “a modern, AI-powered answers platform that understands natural language, so when people ask questions about a business online, they get straight answers.” , not links”.
As COVID-19 resurfaced throughout 2021, Yext consistently assured investors that pandemic-related impacts on the company’s business were limited as the company adapted to lockdowns and improved the effectiveness of its sales and other operations.
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and misleading statements regarding the company’s business, operations and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Yext’s revenues and profits were materially deteriorating due to, among others, poor sales execution and performance, and disruptions related to COVID-19; (ii) therefore, Yext was unlikely to meet the consensus estimates for its financial results for fiscal 2022 and its outlook for fiscal 2023; and (iii) as a result, the Company’s public statements were materially false and misleading at all material times.
On March 8, 2022Yext issued a press release announcing its fourth quarter (“Q4”) and fiscal 2022 results. Among other items, Yext announced fourth quarter fiscal 2022 revenue of $100.9 millionbelow consensus estimates of $140,000; revenue outlook for the first quarter (“Q1”) of fiscal 2023 $96.3 million at $97.3 millioncompared to consensus estimates of $103.79 million; First Quarter Fiscal 2023 Non-GAAP Net Loss Per Share Outlook for $0.08 at $0.07compared to consensus estimates of $0.05; Revenue outlook for fiscal year 2023 $403.3 million at $407.3 millioncompared to consensus estimates of $444.71 million; and non-GAAP net loss per share outlook for fiscal year 2023 of $0.19 at $0.17compared to consensus estimates of $0.09. The company also announced the departure of its CEO and CFO.
On the same day, during a conference call to discuss Yext’s fourth quarter and fiscal year 2022 results, the company’s new CEO, Michael Walrath (“Walrath”), discussed the Company’s disappointing financial results, revealing, among othersthat “we have seen a fragmentation in our customer interactions and our ability to provide premium service and support” and that, “[i]Looking back, it’s clear that we were too focused on building sales capability and not enough on other functions that drive productivity, particularly sales enablement, training, customer success, and services.” Walrath also revealed that “we saw a really significant disruption to our business” as “in the fourth quarter, 50% — over 50% of our in-person events were canceled due to Omicron surges[,]”while believing that Yext could”[a]definitely “improve his” sell move to be more effective during disruptions like this[.]”
Following the call, a Truist Securities analyst downgraded the company’s rating on Yext to not buy and reduced its price target to $6 of $17noting, among other things, that key performance indicators showed an “unexpected slowdown” in the fourth quarter, that guidance for fiscal year 2023 shows no near-term turnaround, and that “expected changes under new management (in the go-to-market strategy, sales organization) carry execution risks and the timeline for a significant and sustained return to growth is unclear[.]”
Following these revelations, Yext’s share price fell $0.55 per share, or 9.29%, to close at $5.37 per share on March 9, 2022.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Parisand Tel Aviv, is recognized as one of the leading firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP