Vertex, Inc. (VERX) Stock Forecast & Price Target

Vertex Inc. has demonstrated robust financial performance, with total revenue increasing by 12.7% year-over-year, supported by a significant 30% year-over-year growth in cloud revenue, which has consistently been strong for three consecutive quarters. The company's adjusted EBITDA margin has expanded to 23%, reflecting effective management of expenses despite ongoing investments in AI and eInvoicing initiatives, while subscription gross margins improved by 90 basis points year-over-year to 81.4%. Additionally, the annual recurring revenue per customer accelerated to $133.5 million, showcasing an impressive growth of 12% year-over-year, which indicates a positive trend in customer retention and acquisition.

Vertex Inc. is experiencing stagnation in customer growth, with the direct customer count remaining flat year-over-year and showing a sequential decline, which raises concerns about the effectiveness of its customer retention strategies. The company has also revised its revenue guidance downward for two consecutive quarters, highlighting a more troubling outlook as factors such as retail bankruptcies and a shift from on-premise to cloud solutions affect financial stability. Additionally, the anticipated annual recurring revenue (ARR) growth for 2025 has been adjusted to 12-13%, indicating a potential slowdown for 2026 revenue growth, thereby diminishing investor confidence in Vertex’s financial prospects.