ServiceTitan Inc (TTAN) Stock Forecast & Price Target

ServiceTitan Inc. reported significant growth in its customer base, reaching approximately 9,500 active customers, reflecting a 19% increase from the previous year. The company achieved a robust total revenue increase of 29.4% year-over-year, driven by a strong platform revenue growth of 30%, with subscription revenue growth outpacing usage revenue growth at 31% and 26%, respectively. With a healthy net dollar retention rate exceeding 110% and a gross margin of 70.2%, ServiceTitan demonstrates strong operational efficiencies and solid financial performance that support a positive outlook for its stock.

The financial analyst identifies several key reasons for a negative outlook on ServiceTitan's stock. First, the company's subscription revenue growth is expected to fall below 20% in the near term, primarily due to macroeconomic and competitive pressures that are hindering new customer acquisitions. Additionally, operating margins are projected to be 20%, which is below management's target of 25%, largely influenced by increased costs related to operating as a public company, alongside higher-than-anticipated selling and marketing, and research and development expenses.