TechTarget Faces Macro Challenges And Valuation Compression, Analyst Cuts Price Forecast

Needham analyst Joshua Reilly reiterated a Buy rating on the shares of TechTarget Inc TTGT and lowered the price forecast from $40.00 to $25.00.

TechTarget is expected to align its FY25 guidance with consensus estimates of $512 million in revenue (3.4% adjusted Y/Y growth) and $98 million in adjusted EBITDA, said the analyst.

Management is likely to remain cautious due to potential sales and marketing downturns and macroeconomic headwinds in early 2025. Integration progress and $25 million in cost synergies will be key topics, the analyst noted.

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TechTarget is expected to report an in-line fourth-quarter, though management has not updated guidance to reflect one month of revenue from Informa Tech following the December 2nd merger.

Consensus revenue estimates of $78.5 million appear accurate, with Informa Tech contributing about $20 million.

Investors are likely focused on the timing of $25 million in cost synergies and the progress of Informa Tech’s integration.

They also seek clarity on how business segments will be structured. A new revenue segmentation may combine Brand & Content with Intent & Demand, while Intelligence & Advisory could be reported separately, aligning with the updated investor presentation, opined the analyst.

TechTarget provides a unique B2B purchase intent marketing platform, leveraging first-party, privacy-compliant data from 150+ online properties.

Growth drivers include expanding its total addressable market beyond marketing teams, increased first-party data from the BrightTALK acquisition for cross-selling, and a projected rebound in global IT spending.

The updated price forecast is based on 17x EBITDA for the combined entity using consensus FY25 estimates.

Price Action: TTGT shares traded lower by 4.12% at $14.20 at last check Tuesday.

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