TechTarget Inc (TTGT)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	4,461	41,609	949	17,068	16,875
Total stockholders’ equity	US$ in thousands	222,927	217,474	222,757	202,506	152,951
ROE		2.00%	19.13%	0.43%	8.43%	11.03%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $4,461K ÷ $222,927K
= 2.00%

Techtarget Inc.'s return on equity (ROE) has exhibited significant fluctuations over the past five years. In 2023, the ROE stands at a meager 2.00%, representing a substantial decline from the prior year's robust 19.13%. This substantial drop raises concerns about the company's ability to generate profit relative to shareholder equity.

The ROE performance in 2023 is notably weaker compared to the 2022 peak, indicating a potential downturn in the company's profitability and efficiency in utilizing shareholder funds. Moreover, the current ROE of 2.00% is significantly lower than the industry average ROE, suggesting possible inefficiencies or challenges within Techtarget Inc.'s operations.

The sharp decline in ROE from 2022 to 2023 warrants further investigation into the factors driving this decrease, such as declining net income, decreasing asset turnover, or increasing shareholder equity. Management should closely assess and address the underlying issues impacting profitability to enhance shareholder value and ensure sustainable growth in the future.