VTEX (VTEX) AI Stock Analysis

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VTEX

(NYSE:VTEX)

Rating:71Outperform

Price Target:

$7.00

▲(8.36%Upside)

VTEX is well-positioned with strong financial health and robust earnings performance, as evidenced by its solid financial metrics and strategic expansions. However, the high P/E ratio raises concerns about valuation, and macroeconomic factors pose risks. The technical indicators show positive momentum but suggest caution due to overbought signals.

Positive Factors

AI Capabilities

VTEX's new AI capabilities improve their core DTC platform, leading to increased conversion and enhanced customer service.

International Recognition

VTEX brand is gaining international recognition as their platform is getting ranked as a global eCommerce leader by independent parties.

Negative Factors

Growth Guidance

The realization of this value might take longer than expected, given the underwhelming growth guidance for 2025 of 14%-17% expansion in subscription revenues.

Macroeconomic Weakness

A 2% revenue miss in the fourth quarter and weaker than expected guidance are attributed to macroeconomic weakness in Brazil, which accounts for 57% of annual revenues.

VTEX (VTEX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.18B

Dividend YieldN/A

Average Volume (3M)849.36K

Price to Earnings (P/E)78.1

Beta (1Y)0.81

Revenue Growth7.71%

EPS GrowthN/A

CountryUS

Employees1,368

SectorTechnology

Sector Strength79

IndustrySoftware - Application

Share Statistics

EPS (TTM)<0.01

Shares Outstanding101,550,026

10 Day Avg. Volume748,947

30 Day Avg. Volume849,364

Financial Highlights & Ratios

PEG Ratio0.00

Price to Book (P/B)89.62

Price to Sales (P/S)0.00

P/FCF Ratio17.64K

Enterprise Value/Market Cap3.57

Enterprise Value/Revenue4.67

Enterprise Value/Gross Profit24.85

Enterprise Value/Ebitda96.18

Forecast

1Y Price Target

$8.47

Price Target Upside31.11% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

VTEX Business Overview & Revenue Model

Company DescriptionVTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. Its platform enables customers to execute their commerce strategy, including building online stores, integrating, and managing orders across channels, and creating marketplaces to sell products from third-party vendors. It has operations in Brazil, Argentina, Chile, Colombia, France, Italy, Mexico, Peru, Portugal, Romania, Spain, the United Kingdom, and the United States. VTEX was founded in 2000 and is headquartered in London, the United Kingdom.

How the Company Makes MoneyVTEX primarily generates revenue through a subscription-based model, where businesses pay for access to its cloud-based digital commerce platform. This includes fees for the use of its e-commerce, marketplace, and order management solutions. The company also earns money from transactional fees, which are applied to the sales processed through its platform. Additionally, VTEX benefits from strategic partnerships with technology providers and system integrators, as well as offering professional services to help clients implement, customize, and optimize their digital commerce environments.

VTEX Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 17.45%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong financial performance with significant growth in subscription revenue, gross profit, and non-GAAP operating income. Successful customer acquisitions and strategic initiatives in retail media were also highlighted. However, macroeconomic volatility and increased R&D expenses presented challenges.

Q1-2025 Updates

Positive Updates

Strong Subscription Revenue Growth

Subscription revenue grew 15% FX Neutral in Q1 2025, with a notable increase in enterprise customer growth and platform expansion.

Gross Profit and Margin Expansion

Gross profit reached $41 million, a 22% growth FX Neutral, with a 3.7 percentage points margin increase year-over-year.

Non-GAAP Operating Income and Free Cash Flow

Non-GAAP operating income increased to $5.3 million, an 85% growth and 4.3 percentage points margin increase year-over-year, supported by a free cash flow generation of $6.6 million.

Successful New Customer Launches

New customer launches included Magazzino and LG in Argentina, Americanas in Brazil, and others, expanding VTEX's global presence.

Recognition in Gartner Report

VTEX was recognized as a customer choice in the 2025 Gartner Voice of Customers for Digital Commerce report for the second year in a row.

Retail Media Strategy and Acquisition

The acquisition of Newtail enhanced VTEX's retail media strategy, adding over 400 advertisers and positioning VTEX as a leader in retail media.

Significant Customer Success Stories

Notable digital transformations with Americanas, J.W. Pepper, and Nestle, showcasing VTEX's ability to deliver impactful solutions.

Negative Updates

Macroeconomic Volatility

Ongoing macroeconomic volatility and increased uncertainty in projections due to factors like shifting trade tariffs and currency fluctuations.

Increased R&D Expenses

R&D expenses increased by 9.3% year-over-year, reflecting a strategic investment but also impacting cost structure.

Company Guidance

In the first quarter of 2025, VTEX reported strong financial performance, with a significant focus on subscription revenue and profitability. Subscription revenue grew by 15% on an FX-neutral basis, reaching $52.6 million, while gross profit increased by 22% to $41 million, resulting in a gross margin expansion of 3.7 percentage points year-over-year. The company's non-GAAP operating income saw an 85% increase, reaching $5.3 million, accompanied by a margin increase of 4.3 percentage points. Additionally, VTEX generated a robust free cash flow of $6.6 million. The company also highlighted its strategic expansion efforts, including new customer acquisitions across various countries and advancements in its retail media strategy, which now includes over 400 advertisers. VTEX's guidance for the second quarter projects FX-neutral subscription revenue growth of 12.5% to 15.5%, with full-year 2025 growth expected to be between 14% and 17%.

VTEX Financial Statement Overview

Summary

VTEX demonstrates strong financial health with consistent revenue growth and improved profitability metrics. The balance sheet is robust, featuring low leverage and a strong equity base. Cash flows indicate efficient cash management and operational efficiency. However, the slow revenue growth rate and significant cash outflows from financing activities are potential areas for improvement.

Income Statement

Positive

VTEX has shown consistent revenue growth over the past years, with a significant improvement in profitability margins. The TTM data indicates a gross profit margin of 74.2% and a net profit margin of 6.7%, which are strong indicators of operational efficiency. Notably, the revenue growth rate from 2024 to TTM is modest at 0.7%, suggesting stable but slow expansion. The EBIT and EBITDA margins are also positive, reflecting improved operational performance.

Balance Sheet

Positive

The balance sheet of VTEX reflects a strong equity position with an equity ratio of 69.1% TTM, indicating financial stability. The debt-to-equity ratio is low at 0.013, suggesting minimal reliance on debt financing. The return on equity for the TTM is 6.2%, indicating a reasonable return on shareholders' investments. The company has maintained a healthy cash position relative to its liabilities, supporting its financial robustness.

Cash Flow

Positive

VTEX has shown improvement in cash flow generation with a TTM free cash flow of $29.5 million, a growth of 17% from the previous year. The operating cash flow to net income ratio is 2.01, indicating efficient conversion of net income to cash. The free cash flow to net income ratio is 1.93, demonstrating strong cash generation capabilities. Despite these strengths, the cash flow from financing activities reflects significant outflows, which could impact future liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
228.23M	226.71M	201.52M	157.62M	125.77M	98.68M
	Gross Profit
169.27M	167.29M	140.57M	104.79M	76.18M	63.83M
	EBIT
11.16M	10.10M	-14.60M	-49.92M	-65.93M	6.52M
	EBITDA
15.65M	14.40M	-4.03M	-50.41M	-64.42M	7.06M
	Net Income Common Stockholders
15.30M	12.00M	-13.69M	-52.42M	-60.51M	-825.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
230.89M	214.81M	209.41M	238.56M	298.20M	75.53M
	Total Assets
353.53M	366.78M	341.14M	357.67M	414.97M	140.01M
	Total Debt
6.05M	3.31M	4.10M	6.79M	9.27M	12.51M
	Net Debt
-15.84M	-15.36M	-23.94M	-17.61M	-111.74M	-46.05M
	Total Liabilities
86.00M	110.98M	100.81M	83.00M	87.78M	64.26M
	Stockholders Equity
267.50M	255.75M	240.29M	274.66M	327.18M	75.62M
Cash Flow		Free Cash Flow
29.50M	25.19M	3.79M	-29.56M	-54.74M	9.52M
	Operating Cash Flow
30.80M	27.26M	4.26M	-29.22M	-52.99M	11.16M
	Investing Cash Flow
3.81M	-20.01M	38.42M	-43.38M	-166.78M	-6.10M
	Financing Cash Flow
-28.92M	-14.03M	-38.43M	-19.58M	283.68M	24.96M

VTEX Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.46

Price Trends

50DMA

5.78

Positive

100DMA

5.69

Positive

200DMA

6.14

Positive

Market Momentum

MACD

0.21

Positive

RSI

56.36

Neutral

STOCH

66.09

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VTEX, the sentiment is Positive. The current price of 6.46 is above the 20-day moving average (MA) of 6.46, above the 50-day MA of 5.78, and above the 200-day MA of 6.14, indicating a bullish trend. The MACD of 0.21 indicates Positive momentum. The RSI at 56.36 is Neutral, neither overbought nor oversold. The STOCH value of 66.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VTEX.

VTEX Risk Analysis

VTEX disclosed 1 risk factors in its most recent earnings report. VTEX reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

VTEX Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OLO	74 Outperform	$1.42B	484.00	0.49%	―	23.31%	―
VTEX	71 Outperform	$1.18B	78.11	6.26%	―	7.71%	―
DSP	65 Neutral	$790.22M	419.60	4.15%	―	30.64%	―
MLNK	63 Neutral	$1.22B	―	-6.49%	―	5.15%	28.27%
Sector *	62 Neutral	$11.80B	10.10	-7.47%	2.99%	7.37%	-8.16%
BMBL	56 Neutral	$511.29M	―	-46.57%	―	-2.39%	-2961.26%
BIGC	54 Neutral	$382.07M	―	-64.59%	―	5.33%	58.41%

* Technology Sector Average

Performance Comparison

VTEX

6.64

-0.10

-1.48%

BIGC

BigCommerce Holdings

4.92

-2.93

-37.32%

DSP

Viant Technology

13.03

3.61

38.32%

BMBL

Bumble

5.24

-5.38

-50.66%

OLO

Olo

8.47

4.02

90.34%

MLNK

MeridianLink

16.37

-4.06

-19.87%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.