ServiceTitan (TTAN): Evaluating Valuation as Revenue Growth Outpaces Losses

ServiceTitan (TTAN) shares are drawing renewed attention as investors review the company’s recent quarter, with revenue up 14% year over year and losses narrowing considerably. The numbers are fueling discussion about the future direction of the business.

See our latest analysis for ServiceTitan.

After a steady run earlier this year, ServiceTitan’s share price has held relatively flat over recent weeks. With revenue on the rise and losses narrowing, some investors are starting to warm to the stock again as they assess both its growth prospects and ongoing risks in the broader software sector.

If ServiceTitan’s latest update has you rethinking where to look for opportunity, this is a smart moment to explore fast growing stocks with high insider ownership.

With shares drifting sideways even as fundamentals improve, investors are left to wonder if ServiceTitan is currently undervalued or if the market has already baked in all the anticipated growth. Could there be an attractive entry point here, or is the opportunity already reflected in the price?

Price-to-Sales of 11.1x: Is it justified?

ServiceTitan’s stock commands a price-to-sales ratio of 11.1x, placing it well above industry and peer averages. With a last close of $103.75, the premium suggests the market is pricing in outsized growth versus many competitors, despite recent losses.

The price-to-sales ratio measures how much investors are willing to pay for a company’s revenue. This is an important yardstick for unprofitable tech firms. For high-growth software companies, it can be a proxy for future earnings power and scaling potential, especially when profits are still elusive.

At 11.1x, ServiceTitan trades at an expensive level not only relative to peers (6.4x) but also the broader US Software industry (5.3x). Our fair value estimate, based on a fair price-to-sales multiple of 6.7x, also flags a steep premium. Unless ServiceTitan delivers a sharp acceleration in future growth, the stock could face renewed pressure as expectations reset closer to sector norms.

Explore the SWS fair ratio for ServiceTitan

Result: Price-to-Sales of 11.1x (OVERVALUED)

However, slowing revenue growth and a history of persistent losses could weigh on sentiment if ServiceTitan does not accelerate its path to profitability.

Find out about the key risks to this ServiceTitan narrative.

Another View: Discounted Cash Flow Signals Even Greater Caution

While the price-to-sales ratio paints ServiceTitan as expensive, our DCF model takes an even more conservative stance. The SWS DCF model estimates fair value near $30.56 per share, which is far below the current price. This raises the question: Has the market truly priced ServiceTitan’s growth potential, or is optimism running ahead of reality?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ServiceTitan for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ServiceTitan Narrative

Keep in mind, if our analysis does not reflect your perspective or if you'd rather dive into the numbers firsthand, you can build your own view in just a few minutes, starting here: Do it your way.

A great starting point for your ServiceTitan research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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