This technology company is expected to grow at an annual rate of 20% over the next five years.
TechTarget, Inc. (TTGT)
From Upside
TechTarget, Inc. (TTGT) connects corporate customers with technology vendors that sell software, storage, security, and networking products. The U.S. represented 75% of sales for the 12 months ended June, with the United Kingdom being the second-biggest market at 11% of sales.
TechTarget isn’t cheap, earning a Quadrix Value rank of 27 and trading at 30 times trailing earnings. But few companies are generating stronger growth, a trend expected to continue into 2020. TechTarget’s five-year growth in profit and sales ranks in the top 25% of our research universe. For the 12 months ended June, both topped 8% growth. For next year, earnings per share are expected to climb 17% and revenue 10%.
The stock trades at a more reasonable 21 times estimated 2020 profits, versus a median of 19 for the S&P 1500 Index communication-services sector. Scheduled to announce September quarter results on Nov. 6, the company is expected to report per-share profits of $0.23, up 33%, on revenue of $33.6 million, up 9%. In the past eight quarters, TechTarget has exceeded consensus profit estimates seven times and sales estimates six times.
TechTarget is rated Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, November 2019