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Bull Of The Day: TechTarget (TTGT)

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The medically induced economic coma that we have lived through the past 2-years has forced the world to function remotely, driving a nearly immediate pull-forward in digital adaptation and providing well-positioned next-generation innovators with an unprecedented tailwind that shows no signs of slowing as the Roaring 20s recommence.

TechTarget (TTGT - Free Report) , the world’s leading provider of technology purchase intent data and services, is one such digitally powered enterprise with operations predicated for knowledge-based sales in the new economy. This future-focused strategic enterprise solution company provides best-in-class B2B customer behavioral data to help maximize sales opportunities within the rapidly expanding enterprise tech sector.

TechTarget’s mid-February earnings report drove up long-term expectations for this niche customer data supplier (with a quickly growing total accessible market, aka TAM), driving TTGT into a Zacks Rank #1 (Strong Buy), with long-term earnings growth potential that can’t be ignored.

The consensus price target for this still under-the-radar technology play is over $100 a share, and it’s only a matter of time before this now heavily discounted stock (over 30% off highs) gets back up there (50% upside in many cases).

The Business

TTGT has more than quadrupled in value since its pandemic lows, having gone from a slow-growth micro-cap information company into the global leader in intent data for next-generation enterprise software. The company’s more than 2,500 customers are in critical 4th Industrial Revolution-focused fields like cloud computing, big data, artificial intelligence (AI), cybersecurity, and numerous other digitally energized business solutions.

TechTarget has 22 years’ worth of technology onboarding experience with more than 20 million ‘permissioned’ members it collects data from, generating 1.4 million leads annually (and growing). The pandemic was the exact digital jump-starter the company needed to solidify its dominance of behavioral data analytics in the tech space.  

TechTarget just named Forbes Best Mid-Size Companies of 2022 (market cap between $2 and $10 billion). Following its inclusion in Forbes’ Best Small-Cap Companies of 2021, this rapidly expanding enterprise is looking to market on Forbes’ Best Large-Cap Companies of 2023. With 78% revenue growth in 2021, swelling investable capital, and a 5-year compounded annual shareholder returns north of 50%, I see this 2023 large-cap goal as a very attainable feat.

TechTarget has been a massive beneficiary of the global economy’s rapid digital transformation. It remains at the forefront of swelling enterprise demand as companies turn to the ease and convenience that TechTarget’s understanding and identifying solutions provide the tech world’s sales and marketing teams.

The firm’s tech-focused insight about the target customers allows its users to focus on the right set of cloud-based enterprise solutions from its tech vendor partners, setting both buyers and vendors up with the most advantageous execution plans for their quickly growing and improving business models as our economy rapidly digitalizes.

Technical Analysis

TechTarget was perfectly positioned for the imminent technological renaissance and managed to execute on the pandemic’s digitalizing opportunities exceedingly well. Analysts have been getting increasingly bullish on TTGT in recent weeks as its shares finally float down to an equitable level after an over-euphoric pandemic rally (going from less than $17 a share at its pandemic low to over $100 less than a year later).

TTGT has been trading in a highly volatile manner due to its “pandemic-winner” profile, which has caused many future-focused stocks to slip into bear market territory in recent months (-20% or more off highs).

TTGT bounced off a critical extended horizon Fibonacci-retracement from 2018’s summer highs to the lows that December 2018 brought. This Fib from 2018 has been crucial to TTGT’s technical outlay for years now, having peaked out at nearly the exact long-term technical target (423.6% Fib-retracement at $111.44 a share) this Fib provided 3 years prior.

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Today the shares bounced cleanly off the 261.8% Fib-retracement just south of $72.96 a share and headed higher from there. TTGT is trading at a recently discounted valuation south of 30x forward P/E, and with double-digital annual growth projections for years to come, the value looks to be undeniable here.

Final Thoughts

The fundamental and technical stars appear to be aligning on this underappreciated mid-cap equity. TechTarget’s leading global positioning in the intent data and services corner of the burgeoning tech space positions it for years of growth as innovators endless assess new ways to get their product in front of the right customers.

It’s time to consider starting a position in TTGT amid the current market opportunity ripening volatility.


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