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The Trade Desk (TTD - Free Report) is an advertising technology company that has experienced explosive growth over the last several years, and thanks to emerging trends in digital advertising is expected to continue to grow at a compelling rate. Not only is TTD projecting strong sales and earnings growth in the coming years, but has also received earnings estimate upgrades recently, giving it a Zacks Rank #1 (Strong Buy) rating, and improving near-term expected returns.
The Trade Desk specializes in advertising technology solutions. It provides a self-service platform that enables advertisers and agencies to buy digital advertising campaigns across various channels and formats. The Trade Desk's platform utilizes data-driven insights, real-time bidding, and advanced targeting capabilities, empowering advertisers to reach their target audiences more effectively and optimize their advertising campaigns for better results.
Similar to how most stock trades today are executed by machines, advertising transactions are moving towards this algorithmic process as well. Because of the shifting trends in ways people consume content online, and the fragmented nature of it, marketers have had to find innovative new ways to communicate with customers. The Trade Desk and its platform has become a mission critical tool for savvy new marketers to take advantage of the opportunities across the spectrum of digital platforms.
Because of its advantageous position in the industry, at the crossroads of the digital revolution, and online marketing, TTD has grown at a preposterous pace. Since it’s IPO in 2016, TTD stock has compounded at an annual rate of 65%, returning 2,900% over that period. Fortunately for investors, it probably isn’t too late to get involved, as The Trade Desk and algorithmic marketing industry are still in their early innings.
Image Source: Zacks Investment Research
Elite Sales and Earnings Growth
Along with its top Zacks Rank, The Trade Desk boasts enviable sales and earnings growth estimates. Current quarter earnings are projected to climb 30% YoY, while sales are expected to grow 20% YoY during the same period. Over the next 3-5 years EPS are forecast to grow 24% annually, a phenomenal figure by any measure and demonstrating the incredible potential for the industry.
Image Source: Zacks Investment Research
TTD has also made it a priority to increase its Free Cash Flow over the last couple of years, which reached $500 million in the trailing twelve months. This abundance of cash allows management considerable flexibility, allowing them financial breathing room while also enabling them to reinvest in the highest leverage areas of the business.
Image Source: Zacks Investment Research
Huge Tailwinds in Connected TV
At The Trade Desk, Connected TV (CTV) is currently the largest and fastest growing business segment and will be for the foreseeable future. Connected TV is rapidly becoming one of the most critical channels for advertisers to reach customers as time spent watching tv and streaming continues to grow.
When you consider that 87% of US households have a CTV and 46% watch video via a connected TV daily, you can begin to understand the scope of TTD’s opportunity. Additionally, The Trade Desk platform has been used to reach 90 million households on 120 million devices.
While the streaming wars have made the competition for eyeballs fierce, TTD sits in an exceptional position to benefit. As a sort of ‘pick and shovel’ resource, TTD’s platform is set to benefit from the continued growth of streaming applications and usage.
The Trade Desk has long anticipated this exponential rise in CTV usage and advertising, and has positioned itself accordingly. By utilizing complex computing and AI, TTD can connect advertisers with their target market through highly targeted campaigns.
Image Source: EMARKETER
Bottom Line
The Trade Desk is an extremely well positioned company, with numerous secular tailwinds at its back. In addition to the points addressed above, TTD has also only just begun to branch out into international business opportunities, which will truly take it to the next level.
TTD currently has a premium valuation, trading at 22x one year forward sales, which is above the industry average of 5.1x and above its five-year median of 17.3x. However, because of its special business positioning and immense growth, investors will rarely get an opportunity to buy TTD at a traditionally deep discount.
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Bull of the Day: The Trade Desk (TTD)
The Trade Desk (TTD - Free Report) is an advertising technology company that has experienced explosive growth over the last several years, and thanks to emerging trends in digital advertising is expected to continue to grow at a compelling rate. Not only is TTD projecting strong sales and earnings growth in the coming years, but has also received earnings estimate upgrades recently, giving it a Zacks Rank #1 (Strong Buy) rating, and improving near-term expected returns.
The Trade Desk specializes in advertising technology solutions. It provides a self-service platform that enables advertisers and agencies to buy digital advertising campaigns across various channels and formats. The Trade Desk's platform utilizes data-driven insights, real-time bidding, and advanced targeting capabilities, empowering advertisers to reach their target audiences more effectively and optimize their advertising campaigns for better results.
Similar to how most stock trades today are executed by machines, advertising transactions are moving towards this algorithmic process as well. Because of the shifting trends in ways people consume content online, and the fragmented nature of it, marketers have had to find innovative new ways to communicate with customers. The Trade Desk and its platform has become a mission critical tool for savvy new marketers to take advantage of the opportunities across the spectrum of digital platforms.
Because of its advantageous position in the industry, at the crossroads of the digital revolution, and online marketing, TTD has grown at a preposterous pace. Since it’s IPO in 2016, TTD stock has compounded at an annual rate of 65%, returning 2,900% over that period. Fortunately for investors, it probably isn’t too late to get involved, as The Trade Desk and algorithmic marketing industry are still in their early innings.
Image Source: Zacks Investment Research
Elite Sales and Earnings Growth
Along with its top Zacks Rank, The Trade Desk boasts enviable sales and earnings growth estimates. Current quarter earnings are projected to climb 30% YoY, while sales are expected to grow 20% YoY during the same period. Over the next 3-5 years EPS are forecast to grow 24% annually, a phenomenal figure by any measure and demonstrating the incredible potential for the industry.
Image Source: Zacks Investment Research
TTD has also made it a priority to increase its Free Cash Flow over the last couple of years, which reached $500 million in the trailing twelve months. This abundance of cash allows management considerable flexibility, allowing them financial breathing room while also enabling them to reinvest in the highest leverage areas of the business.
Image Source: Zacks Investment Research
Huge Tailwinds in Connected TV
At The Trade Desk, Connected TV (CTV) is currently the largest and fastest growing business segment and will be for the foreseeable future. Connected TV is rapidly becoming one of the most critical channels for advertisers to reach customers as time spent watching tv and streaming continues to grow.
When you consider that 87% of US households have a CTV and 46% watch video via a connected TV daily, you can begin to understand the scope of TTD’s opportunity. Additionally, The Trade Desk platform has been used to reach 90 million households on 120 million devices.
While the streaming wars have made the competition for eyeballs fierce, TTD sits in an exceptional position to benefit. As a sort of ‘pick and shovel’ resource, TTD’s platform is set to benefit from the continued growth of streaming applications and usage.
The Trade Desk has long anticipated this exponential rise in CTV usage and advertising, and has positioned itself accordingly. By utilizing complex computing and AI, TTD can connect advertisers with their target market through highly targeted campaigns.
Image Source: EMARKETER
Bottom Line
The Trade Desk is an extremely well positioned company, with numerous secular tailwinds at its back. In addition to the points addressed above, TTD has also only just begun to branch out into international business opportunities, which will truly take it to the next level.
TTD currently has a premium valuation, trading at 22x one year forward sales, which is above the industry average of 5.1x and above its five-year median of 17.3x. However, because of its special business positioning and immense growth, investors will rarely get an opportunity to buy TTD at a traditionally deep discount.