Yext is valued at $525 million, but the Yext IPO won't be as hyped on Wall Street as the recent Snap Inc. (NYSE: SNAP) IPO.
But tech investors have anticipated the IPO for two years, which means there will be a frenzy for Yext stock on the Yext IPO date. We could see the Yext IPO as soon as April.
Of course, the mainstream media will talk about the tech company going public, but you won't see advice on whether Yext is a good investment.
That's why we're providing Money Morning readers with everything they need to know about the company in our Yext IPO and stock guide. That will include whether it is a good investment.
Let's start with what the company does...
Businesses use Yext to improve the online information about their business.
Through the Yext Knowledge Engine, accuracy about a business' information can be improved through search engine optimization, GPS systems, digital assistants, and social networks.
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And since its founding in 2006, Yext has built an impressive client list, including:
And with those impressive clients, Yext is rapidly growing its revenue...
According to its IPO filing, Yext generates most of its money through growing its current products and services as opposed to acquisitions.
For its 2015 fiscal year, the tech company generated $60 million. In 2016, that climbed to $89.7 million.
That's an increase of 49.5% in just one year.
However, the company still isn't profitable. In 2015, Yext reported a net loss of $17.3 million and $26.5 million in 2016.
That means losses for the company increased by 53.17% in one year.
In the IPO filing, Yext said the key factors affecting its performance were adding new customers, retention and expansion of its existing customer base, and the market adoption of cloud-based digital knowledge software.
Now that you know how the tech company operates and its revenue totals, here are the must-know details about the IPO...
Luckily for Yext, the "YEXT" stock symbol was still available.
This will help investors easily identify the company and make it easier for them to find the stock symbol.
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Yext will be listed on the New York Stock Exchange (NYSE) under the symbol "YEXT." So on the official Yext IPO date, it will appear as Yext (NYSE: YEXT).
So when can investors get their hands on the tech stock?
Yext filed its IPO with the U.S. Securities and Exchange Commission (SEC) on March 13, 2017.
However, filing an IPO in March doesn't mean the company will go public this month...
For example, Snapchat filed its IPO on Feb. 2, 2017. But retail investors weren't able to buy Snapchat stock until March 2, 2017.
If Yext follows Snapchat's timeline, the Yext IPO could happen as early as April.
All of this information is important to have, but the most important question investors have been asking us is "should I buy Yext stock?"
Here's what Money Morning Members need to know...
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Money Morning Director of Tech & Venture Capital Research Michael A. Robinson does not recommend retail investors buy in at an opening IPO price.
But for those who really want to own YEXT stock on the first day of trading, Robinson has a strategy to maximize profits and minimize risk.
"If folks still want to buy in what we call the after market, then by all means they absolutely must put in a limit order. I recommend no more than 10% above the suggested offering price. That way you don't buy at the high point of the day only to see it fall that session or over the next few trading days," Robinson told me.
However, there's an even better way to play the IPO market...
Robinson recommends Money Morning readers invest in the IPO market through First Trust U.S. Equity Opportunities ETF Fund (NYSE Arca: FPX).
"With it, you can grab the upside and excitement that IPOs offer - and sidestep all the volatility inherent in new issues. In other words, let the fund managers do all the heavy lifting while you sit back and watch the profits pile up," Robinson said.
It also still holds recent IPOs from the past two years in its holdings like Snapchat, Match Group Inc. (Nasdaq: MTCH), and Blue Buffalo Pet Products Inc. (Nasdaq: BUFF).
Through larger holdings like Kraft Heinz and smaller stakes in IPOs like Snapchat, FPX provides a diversified profile and limits the risk of owning just one stock. The stock prices of its top five holdings are all up so far in 2017:
Kraft Heinz Co. (Nasdasq: KHC) YTD Return: 5.49%
AbbVie Inc. (NYSE: ABBV) YTD Return: 4.69%
Shire Plc. (Nasdaq ADR: SHPG) YTD Return: 2.28%
Paypal Holdings Inc. (Nasdaq: PYPL) YTD Return: 9.55%
Facebook Inc. (Nasdaq: FB) YTD Return: 21.13%
The Bottom Line: Yext could go public as early as April. It will trade on the NYSE under "YEXT." The company generated $89.7 million in revenue in 2016, but it also recorded a net loss of $26.5 million in 2016. Investors who want to play the Yext IPO while limiting the risk of investing in an IPO should consider investing in FPX.
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