Earnings Release: Here's Why Analysts Cut Their ServiceTitan, Inc. (NASDAQ:TTAN) Price Target To US$98.20
One of the biggest stories of last week was how ServiceTitan, Inc. (NASDAQ:TTAN) shares plunged 36% in the week since its latest quarterly results, closing yesterday at US$56.01. The results don't look great, especially considering that statutory losses grew 19% toUS$0.26 per share. Revenues of US$292,756,000 did beat expectations by 2.4%, but it looks like a bit of a cold comfort. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from ServiceTitan's 17 analysts is for revenues of US$1.14b in 2027. This would reflect a satisfactory 7.3% increase on its revenue over the past 12 months. Losses are expected to increase slightly, to US$1.39 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.14b and losses of US$1.30 per share in 2027. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a pronounced increase to its losses per share forecasts.
Check out our latest analysis for ServiceTitan
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 12% to US$98.20, with the analysts signalling that growing losses would be a definite concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic ServiceTitan analyst has a price target of US$110 per share, while the most pessimistic values it at US$76.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that ServiceTitan's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past year. Compare this to the 429 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it looks like ServiceTitan is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at ServiceTitan. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ServiceTitan going out to 2029, and you can see them free on our platform here..
Even so, be aware that ServiceTitan is showing 3 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.