ServiceTitan Inc (TTAN) Stock Forecast & Price Target

ServiceTitan Inc has demonstrated robust growth, reporting approximately 9,500 active customers as of the end of FY24, marking a 19% increase year-over-year. The company achieved a total revenue growth of 29.4%, driven by a 30.0% increase in platform revenue, bolstered by strong new customer acquisitions and effective customer expansions. Additionally, the subscription revenue growth of 31%, coupled with a gross margin improvement to 70.2%, underscores the company's operational efficiencies and strong financial performance, paving the way for a positive outlook.

The financial analyst's negative outlook on ServiceTitan is primarily driven by the expectation of subdued subscription revenue growth, projected to be below 20% due to macroeconomic conditions and increasing competition that may hinder new customer acquisition. Additionally, the anticipated operating margin is expected to fall to 20%, which is lower than the company's target of 25%, largely due to costs associated with being a public company. Furthermore, higher-than-expected selling and marketing, as well as research and development expenses, have contributed to operating costs exceeding estimates, raising concerns about the sustainability of profitability in a competitive environment.