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TechTarget Q3 Earnings: Is NasdaqGM:TTGT Expensive at 75.7x Price/EPS?

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TechTarget, Inc. (NasdaqGM:TTGT) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.26/share on revenue of $34.508 million. The consensus earnings per share (EPS) of $0.26/share is based on a poll of 4 analysts and represents a growth in eps of 0.0% over the same quarter last year, when the company reported earnings of $0.26/share.

The revenue forecast of $34.508 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 2.1%. Last year the company reported $33.809 million in revenue for the quarter.

Expected to report flat EPS for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $34.51 $33.81 2.1%
EPS $0.26 $0.26 0.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from TechTarget, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.24 $0.28 16.7% Beat
Q1, 2020 $0.17 $0.19 13.4% Beat
Q4, 2019 $0.27 $0.27 0% Met
Q3, 2019 $0.23 $0.26 14.7% Beat
Q2, 2019 $0.25 $0.26 5.1% Beat
Q1, 2019 $0.15 $0.19 28.8% Beat
Q4, 2018 $0.17 $0.18 2.9% Beat
Q3, 2018 $0.20 $0.17 −12.8% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 9.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $37.66 $41.09 9.1% Increase
May 6, 2020 $23.50 $25.14 7.0% Increase
February 12, 2020 $26.81 $26.47 −1.3% Decline
November 6, 2019 $25 $27.50 10.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.06, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.06 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

TechTarget, Inc. is currently trading at $45.10/share, down −4.6% for the day. The company is trading at approximately 88.0% of its 52-week high of $51.18/share. The company’s stock price is up 9.8% since the last earnings report and down −5.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 57.27 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:TTGT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 75.71 and a forward P/E multiple of 44.57.

TechTarget, Inc.’s current share price also implies a price-to-book (P/B) multiple of 8.09. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $45.10
P/E Ratio 75.7x
P/E Ratio (Fwd) 44.6x
PEG Ratio 3.5
Total Debt / Total Capital 3.9%
Levered Free Cash Flow $36.177 million
EV / EBITDA 43.4x

Finbox

TechTarget, Inc. is a small-cap stock with a market capitalization of $1.301 billion and a total enterprise value of $1.299 billion. The company operates in the Communication Services sector and the Media industry.

TechTarget, Inc. provides specialized online content for buyers of enterprise information technology (IT) products and services in North America and internationally. It also provides purchase-intent marketing and sales services for enterprise technology vendors; and customized marketing programs that integrate demand generation and brand advertising techniques. The company offers online services, including IT Deal Alert, including priority engine, qualified sales opportunities, deal data services; demand solutions, such as white papers, webcasts, podcasts, videocasts, virtual trade shows, and content sponsorships; brand solutions comprise on-network, off-network, and microsites and related formats branding; and custom content creation. It also operates an integrated content platform that consists of a network of approximately 140 Websites that focus on a specific IT sector, such as storage, security, networking, or business applications. In addition, the company enables registered members to conduct their pre-purchase research by accessing vendor supplied content through a websites network. TechTarget, Inc. was founded in 1999 and is headquartered in Newton, Massachusetts.

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