ServiceTitan: Underappreciated Vertical Software Leader Poised for Durable Growth and Re-Rating

In a report released today, Josh Baer from Morgan Stanley upgraded ServiceTitan, Inc. Class A to a Buy, with a price target of $131.00.

Josh Baer has given his Buy rating due to a combination of factors that have improved meaningfully since his initial Equal-weight view a year ago. He now sees ServiceTitan as a high-quality vertical software leader whose growth and margin prospects are not fully reflected in the current share price, describing it as an underappreciated compounder. Key earlier concerns around valuation, the pace of scaling in the Commercial segment, and sales/go-to-market efficiency have, in his view, inflected positively, leading him to align his conviction in the business with a more constructive stance on the stock. He also highlights the company’s strong positioning to benefit from AI, supported by a differentiated data and software footprint that can reinforce its competitive moat.

Baer underscores that ServiceTitan operates in large and expanding end markets, maintains clear market leadership, and has a strong track record of innovation, execution, and attractive unit economics. Despite these strengths, he notes that TTAN’s valuation now sits at more than a 25% discount to its core vertical software peer group on an EV/Gross Profit basis, creating what he views as a favorable entry point. He expects durable revenue growth combined with margin expansion to support upside toward his $131 price target, with Q4 outperformance and potential FY27 guidance above current expectations serving as near-term catalysts. With an improved bull/bear skew of better than 5:1 and what he views as compelling long-term portfolio merits, he raises the stock to Overweight and designates it as a top pick.

In another report released on January 14, Needham also assigned a Buy rating to the stock with a $140.00 price target.

Based on the recent corporate insider activity of 68 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TTAN in relation to earlier this year.