- KeyBanc Capital Markets Analyst Justin Patterson reiterated the shares’ overweight rating. TechTarget, Inc. TTGT, Reduced target price from $50 to $35reflecting a lower EBITDA outlook.
- The analyst’s new estimates for 2023 point to several signs of weakness across the IT landscape and project no growth compared to recently reported levels first quarter of fiscal year 23.
- Content-producing companies face a threat from AI (e.g., websites direct consumers to ChatGPT), the analyst notes.
- Patterson thinks “a more stable macro” may be needed to show that AI isn’t disrupting TechTarget’s business.
- In the recently released first quarter, the company lowered its 2023 revenue guidance from $260-265 million to $225-230 million, down about 13% at midpoint.
- The analyst reduced 2023 adjusted EBITDA estimates by $23 million to $67 million due to the lower revenue outlook. For FY24, Adjusted EBITDA is reduced by $22 million to $81 million.
- Patterson also cut revenue estimates for 2023 and 2024 by 13% and 20%, respectively.
- However, share buybacks and M&A should support the stock going forward.
- In addition, product innovation and an eventual macroeconomic recovery will lead to a return to healthy growth and margin expansion.
- Price promotion: TTGT shares are trading up 3.69% to $31.43 at last check on Monday.
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