ServiceTitan: A Plumber’s Hope, an Investor’s Sanity

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The current infatuation with all things Artificial Intelligence has, predictably, produced a certain amount of market delirium. Both BigBear.ai (BBAI 1.85%) and ServiceTitan (TTAN +2.29%) have suffered, though for rather different reasons, both equally tiresome. One, a purveyor of algorithmic prognostication, struggles to justify its existence; the other, a system for managing plumbers, appears to be judged by a public incapable of understanding the sheer necessity of a well-scheduled wrench.

The broad market, as represented by the S&P 500 and the relentlessly optimistic Nasdaq-100, has enjoyed a rather vulgar display of prosperity these past six months, gaining 9.8% and 10.6% respectively. ServiceTitan, however, has slumped by 23.6%, while BigBear.ai has merely withered by 21.4%. One begins to suspect that the market has lost its grip on reality, mistaking novelty for value.

BigBear.ai, it seems, had hoped to ride the wave of AI enthusiasm. A sensible ambition, perhaps, had it not been for the rather inconvenient truth that its revenues are, to put it politely, diminishing. ServiceTitan, on the other hand, actually sells something – a business management platform for those tradesmen who keep the modern world from collapsing into a damp and leaky ruin. And yet, it too is punished, the victim of a collective hysteria regarding the supposed obsolescence of all Software-as-a-Service.

I venture to suggest that ServiceTitan, while not entirely without its flaws, represents a considerably more prudent investment than BigBear.ai. For the patient investor, it offers at least the possibility of a return, a commodity increasingly rare in these turbulent times.

The Matter of Growth (or Lack Thereof)

BigBear.ai’s most recent quarterly report revealed a truly alarming decline in revenue – a full 20% – accompanied by a contraction of its gross margin. Four years of losses, and a consistent failure to meet expectations, suggest a business model less than robust. The stock, naturally, has suffered, falling some 40% from its initial public offering price in December 2021. One suspects a further decline is not merely possible, but inevitable.

ServiceTitan, by contrast, continues to grow at a respectable pace. Its recent results for the third fiscal quarter of 2026 revealed a 25% increase in revenue, and an adjusted operating margin of 8.6% – a substantial improvement over the previous year. Revenue now stands at $249 million, an annual run rate approaching a billion dollars. The market, of course, chose to ignore this, punishing the stock despite the positive news. Such irrationality is, sadly, commonplace.

ServiceTitan remains unprofitable, but has consistently exceeded analyst expectations. I consider it undervalued, a rare and increasingly precious quality. A company demonstrating such growth deserves, at the very least, a sensible share price.

A Business Model with Foundations

BigBear.ai relies heavily on government contracts and defense spending – a precarious foundation, even in the best of times. Competition is fierce, and the prospect of sustained profitability appears remote. One might describe it, charitably, as a speculative venture.

ServiceTitan, however, provides a service that is genuinely useful. It offers an operating system for small businesses in the trades – plumbers, carpenters, electricians – those essential, yet often overlooked, pillars of modern society. Think of it as Salesforce for the working man, stripped of the unnecessary complexity and corporate jargon.

Anyone who has attempted to engage the services of a skilled tradesman will appreciate the sheer logistical challenge involved. Many such businesses operate with a charmingly antiquated approach – appointments scheduled by telephone, contracts signed on scraps of paper, invoices dispatched by post. They lack the time, or perhaps the inclination, to master the intricacies of modern Customer Relationship Management systems.

ServiceTitan provides a solution tailored to their needs – a platform of software tools designed specifically for their types of operations, presented in a clear and intuitive manner. I believe this represents a strong and sustainable business model, serving an underserved market and demonstrating consistent revenue growth.

The Spectre of Artificial Intelligence

So why the investor skepticism? The current narrative suggests that Artificial Intelligence will render all Software-as-a-Service obsolete, allowing businesses to generate their own software at minimal cost. A fanciful notion, to be sure. Salesforce, another victim of this hysteria, has suffered a 32% decline in its share price over the past year.

I fail to see how AI poses a genuine threat to ServiceTitan’s business. The company serves a market that requires dedicated solutions. Most plumbers, carpenters, roofers, and house painters are rather busy actually performing their trades. They are unlikely to spend their time “vibe coding” their own online billing systems.

ServiceTitan’s price-to-sales (P/S) ratio stands at 9.0 – a considerably more attractive valuation than BigBear.ai’s P/S of 12.3. BigBear.ai may well continue its descent, even if the SaaS industry survives the AI apocalypse. ServiceTitan, however, appears well positioned to thrive, and its stock represents a promising buy for those willing to exercise a little common sense.

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2026-01-26 14:12