TechTarget, Inc. Common Stock (TTGT)

Short-term

Turnover ratios

The analysis of TechTarget, Inc.'s activity ratios reveals multiple insights into its operational efficiency over the period examined.

Starting with the inventory turnover ratio, the data indicates the absence of any recorded values across all reporting periods, suggesting either inventory levels are negligible, the company operates predominantly on digital or service-based products with minimal tangible inventory, or that inventory management is not a significant component of its operational metrics.

The receivables turnover ratio exhibits considerable fluctuation over time, reflecting varying collection efficiency. Initially, from June 2020 through September 2021, the ratios ranged from approximately 3.69 to 5.67, indicating moderate efficiency in collecting receivables. A notable spike occurs in September 2022, with an extraordinary figure of 4,941.79, which is likely a data anomaly or typographical error, considering typical receivables turnover values. Subsequently, the ratio improves consistently, reaching 6.09 by March 2024, indicating enhanced collection efficiency. Conversely, the ratio in March 2025 drops sharply to 3.45, suggesting potential deterioration in accounts receivable management or changes in credit terms.

The payables turnover ratio displays significant volatility. Early periods show moderate to high turnover rates, such as 18.32 in June 2020, increasing substantially to 21.55 in September 2020. However, a sharp decline to 8.68 occurs at the end of 2020, before a rapid escalation to 33.38 in March 2022. This indicates fluctuations in the company's ability or willingness to settle its payables promptly. The very high ratio in March 2022 suggests a rapid settlement of liabilities or a possible one-time event affecting accounts payable. Later periods show a steadier pattern, with ratios generally ranging from approximately 14 to 25, reflecting more consistent payables management. The ratios decrease again towards the end of the period, with figures around 14 to 15, possibly indicating longer payables periods or more extended credit terms received from suppliers.

The working capital turnover ratio presents a mixed picture. Initial periods show ratios between 1.82 and 2.42, suggesting moderate utilization of working capital to generate sales. However, an outlier appears in September 2022 with a drastic ratio of 772.95, which likely indicates data inconsistency, a reporting error, or an extraordinary event distorting the ratio. In subsequent periods, the ratio stabilizes around 0.68 to 0.80, reflecting a relatively lower efficiency in turning working capital into sales, which could be due to increased investment in receivables or other working capital components. Data for late 2024 and forward is unavailable.

In summary, the ratios depict a company with fluctuating liquidity and efficiency metrics, with notable anomalies suggesting potential data issues. The overall trend for receivables and payables suggests periods of both improved and diminished operational efficiency, while working capital utilization appears relatively modest after initial volatility, potentially indicating conservative working capital management or shifts in operational strategy.

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Average number of days

The activity ratios of TechTarget, Inc. for common stock reveal several notable trends and characteristics over the analyzed periods.

Firstly, the days of inventory on hand (DOH) consistently lack specific data, indicating either that inventory levels are negligible or that inventory management is not a significant component of the company's operations during these periods. This suggests that TechTarget may operate primarily in a digital or service-oriented sector where traditional inventory metrics are less relevant, potentially leading to minimal or no physical inventory.

Regarding the days sales outstanding (DSO), there is some fluctuation over time. In the initial periods (June 30, 2020, and September 30, 2020), DSO ranges from approximately 64.32 to 68.66 days, indicating the typical time it takes for the company to collect receivables. A notable spike occurs at December 31, 2020, with DSO reaching approximately 98.85 days, then gradually decreasing to around 62.28 days by December 31, 2023. The data shows a stabilization trend from March 2022 through September 2023, with DSOs generally hovering in the mid-60s days, reflecting consistent collection practices. However, a significant increase is observed at March 2025, where DSO exceeds 105 days, hinting at possible challenges in receivables collection or changes in customer credit terms.

The number of days of payables indicates the average duration the company takes to settle its supplier obligations. Early data points (June 30, 2020, and September 30, 2020) show payables due in approximately 17 to 20 days. There is a notable peak at December 31, 2020, with payables extending beyond 42 days, possibly reflecting strategic payment delays or cash flow considerations. Subsequently, the payables period generally remains between approximately 10 to 25 days, with some fluctuations. The highest noted value, at March 2025, reaches around 33.54 days, suggesting a tendency towards longer payable periods, which could impact supplier relationships or reflect negotiated payment terms.

Overall, these activity ratios suggest that TechTarget's operations feature a relatively efficient receivables process, especially after 2021, with manageable collection periods. The negligible or unspecified inventory days imply minimal physical inventory holdings, aligning with a digital or service-centric business model. The fluctuations in payables periods indicate a strategic approach to managing supplier payments, which could be influenced by cash flow management, credit policies, or operational needs. The significant increase in DSO at March 2025 warrants further investigation to understand potential credit or collection issues.

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Long-term

The analysis of TechTarget, Inc.'s long-term activity ratios indicates significant variations and noteworthy trends over the observed periods.

Fixed Asset Turnover:
- This ratio exhibits a consistent upward trajectory from June 30, 2020, through September 30, 2022, rising from 3.54 to a peak of 7.02. The increasing values suggest an improvement in the company's efficiency in utilizing its fixed assets to generate sales. The peak around September 2022 indicates optimized fixed asset management and asset productivity during this period.
- Post-September 2022, the ratio shows signs of stabilization and slight decline, with values around 6.99 in December 2022 and declining further to 6.23 by June 2024. This stabilization, albeit at a high level, may reflect the company's mature stage of fixed asset utilization or potential capex activity balancing out depreciation and asset renewal.

Total Asset Turnover:
- The total asset turnover ratio demonstrates considerable fluctuation, beginning at approximately 0.61 in June 2020 and declining to a low of 0.32 in December 2020. Following this downturn, there is a gradual recovery, reaching around 0.46 in September 2021.
- A remarkable spike occurs in September 2022, with the ratio skyrocketing to approximately 86.97. This anomaly likely indicates a data irregularity or extraordinary accounting event, rather than a genuine reflection of asset efficiency.
- After this peak, the ratio substantially declines to levels around 0.33-0.38, suggesting a return to more normalized asset utilization efficiencies. The most recent values indicate a downward trend, reaching approximately 0.12 in March 2025, implying decreased asset productivity relative to total assets over time.

Overall Implications:
- The steady increase in fixed asset turnover signifies enhanced asset utilization efficiency with respect to fixed assets over the initial periods, possibly due to strategic asset management or operational improvements.
- The total asset turnover shows volatility, with the extraordinary peak raising questions about potential anomalies in data reporting or extraordinary events affecting asset utilization metrics.
- The recent declining trend in total asset turnover suggests a potential decline in overall asset efficiency or strategic shifts in asset management, warranting further investigation into underlying operational or accounting factors.

In summary, TechTarget’s long-term activity ratios reflect an initial phase of improving efficiency in fixed asset utilization, followed by periods of volatility and a recent decline in overall asset productivity. These ratios highlight the importance of scrutinizing underlying operational, accounting, or strategic changes affecting the company’s asset management performance.