ServiceTitan, Inc. (NASDAQ: TTAN)

Sector: Technology Industry: Software - Application CIK: 0001638826
Market Cap 6.71 Bn
P/B 4.46
P/E -22.49
P/S 7.32
ROIC (Qtr) -13.92
Div Yield % 0.00
Rev 1y % (Qtr) 25.03
Total Debt (Qtr) 158.10 Mn
Debt/Equity (Qtr) 0.11

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 84.98M provides robust 0.54x coverage of total debt 158.09M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 493.45M provide 34.58x coverage of short-term debt 14.27M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 729.74M provides 4.62x coverage of total debt 158.09M, indicating robust asset backing and low credit risk.
  • Tangible assets of 729.74M provide exceptional 38.83x coverage of deferred revenue 18.79M, showing strong service capability backing.
  • Robust free cash flow of 60.46M exceeds capital expenditure of 24.52M by 2.47x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 84.98M barely covers its investment activities of (44.30M), with a coverage ratio of -1.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (44.30M) provide weak support for R&D spending of 296.78M, which is -0.15x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 493.45M provide limited coverage of acquisition spending of (19.78M), which is -24.95x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 84.98M shows concerning coverage of stock compensation expenses of 237.40M, with a 0.36 ratio indicating potential earnings quality issues.
  • Operating earnings of (207.48M) show weak coverage of depreciation charges of 83.04M, with a -2.50 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 281.21 Bn 33.75 6.55 10.73 Bn
2 CRM Salesforce, Inc. 248.88 Bn 34.46 6.17 11.14 Bn
3 SHOP Shopify Inc. 217.18 Bn 121.94 20.30 1.12 Bn
4 UBER Uber Technologies, Inc 182.87 Bn 10.99 3.69 12.19 Bn
5 INTU Intuit Inc. 182.36 Bn 44.28 9.38 6.78 Bn
6 NOW ServiceNow, Inc. 151.53 Bn 87.54 11.96 2.40 Bn
7 ADBE Adobe Inc. 146.69 Bn 21.08 6.33 6.64 Bn
8 ADP Automatic Data Processing Inc 108.05 Bn 26.12 5.17 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.52 2.68
EV to Cash from Ops. EV/CFO 75.22 13.34
EV to Debt EV to Debt 40.43 57.60
EV to EBIT EV/EBIT -30.81 19.20
EV to EBITDA EV/EBITDA -44.44 15.11
EV to Free Cash Flow [EV/FCF] EV/FCF 105.72 14.78
EV to Market Cap EV to Market Cap 0.95 -93.16
EV to Revenue EV/Rev 6.98 4.63
Price to Book Value [P/B] P/B 4.46 4.29
Price to Earnings [P/E] P/E -22.49 -132.44
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -3.77 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) -22.25 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.94 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 266.87 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -21.33 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -62.44 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -21.65 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -15.87 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 34.51 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 2,332.96 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 37.00 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.50 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 3.17 3.75
Current Ratio Curr Ratio (Qtr) 4.14 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.11 0.17
Interest Cover Ratio Int Coverage (Qtr) -22.25 -52.32
Times Interest Earned Times Interest Earned (Qtr) -22.25 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -13.60 -100.06
EBIT Margin % EBIT Margin % (Qtr) -22.64 -164.24
EBT Margin % EBT Margin % (Qtr) -23.66 -116.94
Gross Margin % Gross Margin % (Qtr) 69.20 58.20
Net Profit Margin % Net Margin % (Qtr) -32.50 -121.65