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TechTarget (TTGT) to Report Q3 Earnings: What's in Store?

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TechTarget, Inc. (TTGT - Free Report) is slated to release third-quarter 2018 results on Nov 7.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 22.7%.

In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate and recorded year-over-year improvement on both counts.

In the last reported quarter, the company’s earnings of 21 cents per share surpassed the Zacks Consensus Estimate of 19 cents and were way higher than the year-ago quarter’s figure of 9 cents.

Revenues of $31.5 million matched the Zacks Consensus Estimate and grew 18% from the year-ago quarter.

For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $30.9 million, indicating year-over-year improvement of 10.3%.

Further, the Zacks Consensus Estimate for earnings stands at 18 cents, which is 63.6% higher than the figure reported in the year-ago quarter.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

TechTarget’s focus on all its businesses is yielding positive results. However, the company’s flagship product Priority Engine, within its IT Deal Alert suite of products, is the key growth driver.

In the last reported quarter, revenues from IT Deal products witnessed 21% year-over-year growth backed by Priority Engine solution, which increased nearly 60% year over year.

On the other hand, revenues from Core Online increased 16% on a year-over-year basis, driven by 20% growth in North America and 10% in the international market.  Better-than-expected growth in Core Online offerings was a key driver.

Moreover, the shift to longer-term subscription model bodes well for TechTarget. In the second quarter, 34% of the company’s revenues were attributed to longer-term subscription revenue compared with 21% in the year-ago quarter.

Additionally, the company is benefiting from a healthy IT spending environment, which is resulting in improved budget of customers. 

TechTarget, Inc. Price and EPS Surprise

TechTarget, Inc. Price and EPS Surprise | TechTarget, Inc. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TechTarget currently carries a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are a couple of stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Adobe Systems Incorporated (ADBE - Free Report) with an Earnings ESP of +0.19% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Etsy Inc. (ETSY - Free Report) with an Earnings ESP of +76.27% and a Zacks Rank #2.

Five9, Inc. (FIVN - Free Report) with an Earnings ESP of +5.88% and a Zacks Rank #3.

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