TechTarget (NASDAQ: TTGT) spiraled in morning trading on Thursday after the marketing services company reported mixed Q3 results. The company posted revenues of $77.4 million, up 11% year-over-year but fell short of Street estimates by $2.6 million.
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Earnings came in at $0.46 per share in the third quarter versus $0.32 in the same period last year, surpassing analysts’ estimates by $0.11.
This was the first time in over 12 years that TechTarget missed both its quarterly revenue and Adjusted EBITDA guidance.
In another disappointment, the company stated in its letter to shareholders that it expects its customers to continue taking “a cautious approach to sales and marketing spending through the first half of next year, and as a result, we believe our results will be flat or down when compared to the first half of 2022, with modest improvement in the second half of the year.”
For FY23, TTGT expects its revenues to be in “mid-single digit” with EBITDA margin forecasted to be 40%.
Following the soft outlook, Deutsche Bank analyst Bhavin Shah downgraded the stock to a Hold from a Buy and also lowered the price target to $45 from $85. Shah’s current price target is the lowest price target on the Street.
Shah commented, “We expect persistent IT spending headwinds and technology firms cutting back on sales & marketing to continue weighing on TechTarget’s otherwise strong value proposition.”
