On Thursday, Needham raised the stock price target on TTM Technologies (NASDAQ:TTMI) to $26 from $24, while maintaining a Buy rating on the stock. The firm's analysis highlighted the company's third-quarter performance, which saw revenues at the high end of the guidance.
The revenue increase was driven by an 11% year-over-year growth in Aerospace & Defense (A&D) and a 20% rise in Data Center Computing (DCC) sectors, which helped to offset declines in other commercial areas of TTM's business.
TTM Technologies reported an 8% year-over-year increase in overall revenues, surpassing the consensus estimate of 5%. The standout aspect of the Q3 results was the significant improvement in the company's margins. Both gross margins and operating margins reached new highs, contributing to the positive outlook.
The firm also noted TTM's robust bookings for the quarter, with a book-to-bill ratio of 1.20 and a record backlog in A&D programs. This performance has led to better-than-expected guidance for Q4, reflecting continued strength in A&D and DCC segments and sustained healthy margins.
In response to the company's strong quarter and optimistic outlook, Needham has revised its Q4 and 2025 estimates for TTM Technologies. The firm reiterated its Buy rating, signaling confidence in the company's ongoing performance and future prospects.
InvestingPro Insights
TTM Technologies' (NASDAQ:TTMI) strong performance in Q3, particularly in the Aerospace & Defense and Data Center Computing sectors, aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at $2.01 billion, reflecting its significant presence in the industry.
InvestingPro data shows that TTM's revenue for the last twelve months as of Q2 2024 was $2.32 billion, with a quarterly revenue growth of 10.73% in Q2 2024. This growth trend supports Needham's observation of the company's revenue performance at the high end of guidance.
Two InvestingPro Tips are particularly relevant to the article's content. Firstly, "Net income is expected to grow this year," which corroborates the positive outlook and improved margins mentioned in the Needham analysis. Secondly, "Analysts predict the company will be profitable this year," aligning with the firm's optimistic stance and revised estimates for TTM Technologies.
It is worth noting that InvestingPro offers 8 additional tips for TTM Technologies, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be valuable for those looking to delve deeper into TTM's investment potential.
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