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On Friday, Loop Capital adjusted its price target on ServiceTitan (NASDAQ:TTAN) stock, reducing it to $90 from the previous $105, while maintaining a Hold rating. Currently trading at $82.34, near its 52-week low of $79.81, the stock has seen significant pressure recently. The firm highlighted ServiceTitan’s impressive performance in its second quarter as a publicly traded company, emphasizing the strong growth in Gross Transaction (JO:TCPJ) Volume (GTV), which they consider a critical indicator of the company’s revenue potential and its correlation with customer activity.According to InvestingPro data, ServiceTitan maintains a healthy gross profit margin of 65.46% and is expected to report its next earnings on March 13, 2025. Subscribers can access 8 additional key insights about TTAN through InvestingPro’s comprehensive analysis tools.
ServiceTitan’s GTV increased by 26% year-over-year, marking its highest growth rate in seven quarters. The quarter also saw a decrease of 4.5% sequentially, a significant improvement from the 8.8% sequential decline witnessed last year. With revenue and non-GAAP operating margin guidance for Q1 and FY26 surpassing Loop Capital’s and the Street’s estimates, the firm anticipates a positive investor reception. While the company is not yet profitable, with a net loss of $243.65 million in the last twelve months, InvestingPro analysts project profitability in the current fiscal year.
Loop Capital has raised its FY26 revenue growth forecast for ServiceTitan to 17% from 15%, driven by an increase in the subscription revenue growth estimate from 17.6% to 19.4%. The analyst sees ServiceTitan on the verge of becoming the standard platform for automating business operations in the trades industry, which is currently experiencing a transformation that boosts demand for modern software solutions.
The consolidation wave sweeping the trades industry is seen as a significant catalyst for demand, offering opportunities for efficiency gains through scale. As the leading market share holder in a fragmented sector, ServiceTitan is well-positioned to capitalize on this trend. The firm’s updated estimates place ServiceTitan’s shares at CY25/CY26 EV/S multiples of 8.5x/7.5x, aligning with the averages of its vertical SaaS and ERP peers, as well as other similarly growing software companies.
Loop Capital suggests that if ServiceTitan can sustain its current 20%+ revenue growth trajectory, its shares could command higher multiples, akin to those of the hypergrowth peer group, which trades at average CY25/CY26 EV/S multiples of 13x/11x. Based on InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels, despite its strong revenue growth forecast of 24% for FY2025. The firm’s decision to maintain a Hold rating and lower the price target reflects recent market pullbacks and multiple compressions. The future growth trajectory is expected to become clearer after the company reports its seasonally strong second quarter. Discover more detailed valuation metrics and growth projections in ServiceTitan’s comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, ServiceTitan reported a strong fourth-quarter performance for 2025, with revenue rising 29% year-over-year to $209.3 million. The company also achieved a gross transaction volume of $17 billion, marking a 26% increase from the previous year. Subscription revenue, a significant contributor, grew by 31% to $156.7 million. Analysts at Needham have reiterated a Buy rating for ServiceTitan, maintaining a price target of $125, reflecting confidence in the company’s growth prospects. The company has also achieved positive free cash flow for the first time, signaling robust financial health. Additionally, ServiceTitan is expanding into new markets, including roofing, as part of its growth strategy. The company has provided revenue guidance for fiscal year 2026, projecting between $895 million and $950 million. ServiceTitan’s strategic focus includes enhancing enterprise capabilities and increasing the adoption of its Pro products.
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