ServiceTitan Inc (TTAN) Stock Forecast & Price Target

ServiceTitan Inc. reported strong financial metrics that reflect a positive outlook for the company, highlighted by a 19% increase in active customers, reaching approximately 9,500 at the end of FY24. The company achieved a total revenue increase of 29.4% year-over-year, driven by a robust platform revenue growth of 30%, which included a notable surge in subscription revenue growth of 31%. Additionally, ServiceTitan maintained impressive net dollar retention above 110% and a gross margin improvement to 70.2%, contributing to a gross profit of $146.9 million that exceeded expectations.

ServiceTitan's stock faces a negative outlook due to anticipated subscription revenue growth falling below 20% in the near-term, attributed to macroeconomic factors and competitive pressure impacting new customer sales. Furthermore, the projected operating margin is expected to be 20%, which is below the company's target of 25% largely due to costs associated with being a newly public entity. Additionally, higher-than-anticipated operational expenses, particularly in sales and marketing as well as research and development, have raised concerns about the company’s ability to sustain profitability amidst a competitive landscape.