Critical Analysis: Yext (NYSE:YEXT) & TaskUs (NASDAQ:TASK)

Yext (NYSE:YEXT) and TaskUs (NASDAQ:TASK) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Profitability

This table compares Yext and TaskUs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yext	-1.68%	-3.35%	-1.07%
TaskUs	5.58%	17.73%	9.17%

Institutional and Insider Ownership

71.0% of Yext shares are owned by institutional investors. Comparatively, 44.6% of TaskUs shares are owned by institutional investors. 8.4% of Yext shares are owned by company insiders. Comparatively, 29.3% of TaskUs shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Yext has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, TaskUs has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500.

Earnings & Valuation

This table compares Yext and TaskUs”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yext	$404.32 million	2.47	-$2.63 million	($0.05)	-155.90
TaskUs	$924.36 million	1.37	$45.69 million	$0.59	24.02

TaskUs has higher revenue and earnings than Yext. Yext is trading at a lower price-to-earnings ratio than TaskUs, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Yext and TaskUs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yext	0	2	2	0	2.50
TaskUs	1	4	2	0	2.14

Yext presently has a consensus price target of $7.31, suggesting a potential downside of 6.19%. TaskUs has a consensus price target of $16.43, suggesting a potential upside of 15.94%. Given TaskUs’ higher probable upside, analysts plainly believe TaskUs is more favorable than Yext.

Summary

TaskUs beats Yext on 10 of the 13 factors compared between the two stocks.

About Yext

Yext, Inc. organizes business facts to provide answers to consumer questions in North America and internationally. It operates Yext platform, a cloud-based platform that allows its customers to offer answers to consumer questions, to control the facts about their businesses and the content of their landing pages, and to manage their consumer reviews; and provides customers to update their information and content through its publisher network of maps, apps, search engines, intelligent GPS systems, digital assistants, vertical directories, and social networks, as well as professional services. The company’s platform also enables its customers to centralize, control and manage data fields, including store information comprising name, address, phone number, and holiday hours; professional information, such as headshot, specialties, and education; job information consists of title and description; FAQs and other information. It serves various industries, such as healthcare, hospitality, food services, retail, and financial services. Yext, Inc. was incorporated in 2006 and is headquartered in New York, New York.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.