TechTarget stock rating reiterated at Buy by Needham on operational synergies
Investing.com
Published Jul 02, 2025 06:49AM ET
Investing.com - Needham has reiterated its Buy rating and $15.00 price target on TechTarget , Inc. (NASDAQ:TTGT) following the company's first quarter 2025 earnings report. The stock, currently trading at $7.86, shows significant upside potential according to InvestingPro analysis, which indicates the stock is undervalued despite falling 74.65% over the past year.
TechTarget reported revenue consistent with its implied Q1 guidance, though adjusted EBITDA came in below Needham's estimates. The research firm attributed the performance to operational challenges related to TechTarget's recent merger. InvestingPro data shows the company maintains a healthy gross profit margin of 62.35%, though it operates with moderate debt levels.
Needham expressed increased confidence in TechTarget's full-year revenue guidance of flat year-over-year growth, noting that the implied second-half revenue ramp requires operational improvements already implemented rather than a macroeconomic recovery.
The company has guided for $85 million in adjusted EBITDA for fiscal year 2025, which implies a healthy ramp in the second half of the year. Needham noted that free cash flow conversion will remain impacted throughout 2025 due to one-time items related to the merger.
Needham believes TechTarget's operational synergies are on track, and expects that "a couple quarters of solid execution will lead to a recovery in the multiple for shares."
In other recent news, TechTarget, Inc. reported first-quarter 2025 revenue of $104 million, marking a 77% increase over the prior year, despite a 6% decline on a combined company basis. However, the company anticipates a net loss between $513 million and $545 million, largely due to a non-cash impairment. TechTarget also expects to achieve adjusted EBITDA growth in 2025, driven by accelerated cost synergies. In a strategic move, TechTarget partnered with Salesloft to enhance sales efficiency by integrating their platforms, allowing sales teams to target prospects more effectively. Meanwhile, JPMorgan downgraded TechTarget's stock to Underweight, lowering the price target from $18 to $8, following a challenging fiscal year 2024. In contrast, Craig-Hallum initiated a Buy rating with a $12 price target, noting the company's resolution of filing delays and strategic integration efforts. Additionally, TechTarget missed its Q1 2025 earnings per share forecast, reporting an EPS of -$0.22 against a projected $0.3613, but revenue exceeded expectations, reaching $98.9 million. The company remains focused on leveraging AI to enhance its offerings and anticipates improved performance in the latter half of the year.
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