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The Trade Desk (TTD - Free Report) is a $24 billion provider of a technology platform for advertising. Through a self-service, cloud-based platform, ad buyers create, manage and optimize data-driven digital advertising campaigns which include display, video, audio, native and social, on a multitude of devices, such as computers, mobile devices and connected TV.
I have often called TTD the "CME of Advertising" because their platform allows programmatic trading of advertising real estate across all digital mediums. Thousands of real-time auctions are occurring in any given minute as ad buying programs compete for new space in front of consumer eyeballs.
Earnings Today in the Crosshairs
By the time you read this, TTD may have already reported their Q4 results this morning. The company expects revenues of at least $490 million, indicating growth of 24% year over year.
For the full year, that would bring a haul of $1.58 billion, representing 32% growth.
The consensus mark for earnings is estimated to be 37 cents per share, suggesting an 11.9% decline from the figure reported in the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, delivering an earnings surprise of 19.9% on average.
The reason that TTD slipped into the cellar of the Zacks Rank ahead of their report is because analysts have been dialing down expectations for 2023, with the Zacks consensus EPS estimate from $1.14 to $1.10 in the past few weeks.
This would represent only 6.6% annual growth. So the outlook from the company today will be the key driver of estimates, and thus the stock price, over the coming months.
Green Shoots for Ad Spend?
As always, the commentary from CEO Jeff Green will be entertaining and enlightening about how this little David of advertising is taking on the Goliath "walled gardens" of Google and Facebook with his end-run into the Connected-TV market.
The Trade Desks top-line growth in the fourth quarter is expected to have benefited from the increasing demand for C-TV as well as the growing adoption of Unified ID 2.0, TTD's less-invasive alternative to tracking consumers the way that Google and Facebook have done traditionally.
Higher spending on C-TV in international markets has been a catalyst for The Trade Desk. This momentum is expected to have benefited the top-line growth.
Moreover, strong customer retention is expected to have pushed up the company’s revenues during the quarter. The Trade Desk’s customer-retention rate has remained at more than 95% in the recent period.
This has always been a franchise strength, but being so high, it's always subject to the risk of perceived weakness.
Finally, while EPS revisions turn the ratchet on the Zacks Rank, software, tech, and media investors may pay more attention today to the revenue story. Currently, the consensus calls for 18.5% growth to $1.87 billion for this year.
That makes TTD trade at nearly 13 times sales. We will know soon enough if investors find that cheap or dear.
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Bear of the Day: The Trade Desk (TTD)
The Trade Desk (TTD - Free Report) is a $24 billion provider of a technology platform for advertising. Through a self-service, cloud-based platform, ad buyers create, manage and optimize data-driven digital advertising campaigns which include display, video, audio, native and social, on a multitude of devices, such as computers, mobile devices and connected TV.
I have often called TTD the "CME of Advertising" because their platform allows programmatic trading of advertising real estate across all digital mediums. Thousands of real-time auctions are occurring in any given minute as ad buying programs compete for new space in front of consumer eyeballs.
Earnings Today in the Crosshairs
By the time you read this, TTD may have already reported their Q4 results this morning. The company expects revenues of at least $490 million, indicating growth of 24% year over year.
For the full year, that would bring a haul of $1.58 billion, representing 32% growth.
The consensus mark for earnings is estimated to be 37 cents per share, suggesting an 11.9% decline from the figure reported in the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, delivering an earnings surprise of 19.9% on average.
The reason that TTD slipped into the cellar of the Zacks Rank ahead of their report is because analysts have been dialing down expectations for 2023, with the Zacks consensus EPS estimate from $1.14 to $1.10 in the past few weeks.
This would represent only 6.6% annual growth. So the outlook from the company today will be the key driver of estimates, and thus the stock price, over the coming months.
Green Shoots for Ad Spend?
As always, the commentary from CEO Jeff Green will be entertaining and enlightening about how this little David of advertising is taking on the Goliath "walled gardens" of Google and Facebook with his end-run into the Connected-TV market.
The Trade Desks top-line growth in the fourth quarter is expected to have benefited from the increasing demand for C-TV as well as the growing adoption of Unified ID 2.0, TTD's less-invasive alternative to tracking consumers the way that Google and Facebook have done traditionally.
Higher spending on C-TV in international markets has been a catalyst for The Trade Desk. This momentum is expected to have benefited the top-line growth.
Moreover, strong customer retention is expected to have pushed up the company’s revenues during the quarter. The Trade Desk’s customer-retention rate has remained at more than 95% in the recent period.
This has always been a franchise strength, but being so high, it's always subject to the risk of perceived weakness.
Finally, while EPS revisions turn the ratchet on the Zacks Rank, software, tech, and media investors may pay more attention today to the revenue story. Currently, the consensus calls for 18.5% growth to $1.87 billion for this year.
That makes TTD trade at nearly 13 times sales. We will know soon enough if investors find that cheap or dear.