Analyst Scott Berg of Needham maintained a Buy rating on ServiceTitan, Inc. Class A, retaining the price target of $140.00.
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Scott Berg’s rating is based on ServiceTitan’s impressive second-quarter performance, highlighted by a significant new partnership with Roto-Rooter, a major player in the home services industry. The company reported a 25.5% year-over-year increase in total revenue, surpassing expectations by $7 million, driven by a robust 26.9% growth in subscription revenue.
Additionally, ServiceTitan achieved a milestone with gross margins exceeding 74% for the first time, contributing to a double-digit operating margin of 12.1%. Despite challenges, the company’s gross transaction value rose by 19.3% year-over-year, and demand remained strong, unaffected by changes in Google’s paid search strategy. The Roto-Rooter deal, expected to impact revenues in early FY27, underscores the potential for growth with national brands and PE-backed franchises, supporting a sustained 20% subscription growth outlook into FY28.
Berg covers the Technology sector, focusing on stocks such as PROS Holdings, Dayforce Inc, and Monday.com. According to TipRanks, Berg has an average return of -3.4% and a 40.96% success rate on recommended stocks.
In another report released today, KeyBanc also maintained a Buy rating on the stock with a $140.00 price target.