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Earnings Miss: TechTarget, Inc. Missed EPS By 63% And Analysts Are Revising Their Forecasts

TechTarget, Inc. (NASDAQ:TTGT) just released its latest first-quarter report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$53m, statutory earnings missed forecasts by an incredible 63%, coming in at just US$0.06 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TechTarget after the latest results.

See our latest analysis for TechTarget

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Taking into account the latest results, the consensus forecast from TechTarget's five analysts is for revenues of US$234.6m in 2021, which would reflect a major 38% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 47% to US$0.88. In the lead-up to this report, the analysts had been modelling revenues of US$234.6m and earnings per share (EPS) of US$0.88 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target fell 5.2% to US$97.50, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values TechTarget at US$115 per share, while the most bearish prices it at US$82.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting TechTarget's growth to accelerate, with the forecast 54% annualised growth to the end of 2021 ranking favourably alongside historical growth of 7.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that TechTarget is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on TechTarget. Long-term earnings power is much more important than next year's profits. We have forecasts for TechTarget going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for TechTarget that we have uncovered.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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