This technology company is expected to grow at an annual rate of 20% over the next five years.
TechTarget, Inc. (TTGT)
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