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

Vertex Inc. has demonstrated strong financial performance, with total revenue increasing by 12.7% year-over-year and cloud revenue growing 30% year-over-year, matching the previous quarter's growth rate. The company’s adjusted EBITDA margin expanded to 23%, indicating effective management of elevated investments in AI and eInvoicing, while subscription gross margin also improved by 90 basis points to 81.4%. Additionally, annual recurring revenue per customer has accelerated to a 12% year-over-year growth, further underscoring the company's solid performance and potential.

Vertex Inc. has reported stagnant customer growth, with its direct customer count remaining flat year-over-year at 4,856 and declining by six sequentially, indicating potential challenges in customer retention. The company’s annual recurring revenue (ARR) growth expectations for 2025 have been revised downward to 12-13%, which suggests that revenue growth for 2026 may be one to two percentage points lower than this exit rate. Furthermore, the company issued a revenue guidance for the fourth quarter that fell $5 million short of consensus expectations, marking a concerning trend of downward revisions for two consecutive quarters, exacerbated by a notable decline in net revenue retention and an increase in customer churn.