ServiceTitan Deep Dive - The Hidden SaaS GemServiceTitan, Inc.BATS:TTANHenriqueCentieiroHey everyone, ServiceTitan is a founder-led SaaS platform revolutionizing how trades businesses operate - think plumbers, electricians, HVAC contractors, and roofers. This is a classic "picks and shovels" play on a massive $1.5 trillion market that's been historically underserved by technology. I don't want to bother you with too much text, so here are the bullet points: Market Opportunity & Position Total addressable market: $650B actively targeted (out of $1.5T total trades market) Current penetration: Only 5% of addressable market ($75B GMV) 15,000+ contractors on platform with 110%+ net dollar retention for 13 straight quarters First-mover advantage in providing an end-to-end integrated platform for the fragmented trades industry Financial Metrics (TTM) Revenue: $866M (FY2026E: $939M, +17.7% 2-yr CAGR) Gross Margin: 67.4% Operating Margin: -28.9% GAAP, but 12% non-GAAP (targeting 25% long-term), this is great Free Cash Flow: Positive at 6% margin ($52M FCF) Cash Position: $471M with negative net debt (-$313M). This is also great Valuation Metrics EV/Sales: 10.9x TTM, 9.4x NTM (premium but justified by growth) P/FCF: 186.6x TTM, 145.4x NTM (improving as FCF scales) EV/EBITDA: 69.3x NTM (currently negative TTM) Forward P/E: 125x (transitioning to profitability) Analyst Consensus: $136.20 price target Economic Moat Sources Scale Economies: Operating margins improved 510 bps YoY as platform scales Switching Costs: Deep integration with Pro products and AI automation creates lock-in Counter-Positioning: Specialized trades focus vs. general enterprise software Key Growth Catalysts AI-Powered Automation: Virtual agent "Phin" and Contact Center Pro driving 30%+ attach rates Vertical Expansion: Commercial and roofing segments showing strong traction Pro Products: Higher-margin add-ons increasing customer lifetime value Strategic Partnerships: Ford fleet management, Roto-Rooter deals validate enterprise credibility Insider Confidence Vahe Kuzoyan (Co-founder/President): 7.3M shares (7.8% ownership, $771M value) Dave Sherry (CFO): 348K shares ($40M value) Total insider ownership: 8.3% demonstrating strong alignment Why Investing Now? Fed rate cuts boosting home buying/renovation activity Management raised guidance twice in FY2026 Margin inflection point with path to 25% operating margins AI capabilities are creating competitive separation Only 5% market penetration with a massive runway Risk Factors Valuation Risk: Trading at 10.9x EV/Sales with GAAP losses Growth Management: Rapid expansion could strain resources Industry Cyclicality: Trades sensitive to economic downturns Competition: Potential entry from Salesforce, ServiceNow Profitability Timeline: Still burning cash on GAAP basis Investment Strategy I will start by allocating 1% of my portfolio to the stock, and add more if the price drops. NOTE that this is a high-risk play. Rating: BUY | Risk: High | Conviction: 7.5/10 Quick note: I'm just sharing my journey - not financial advice! 😊