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The Trade Desk (TTD) to Report Q3 Earnings: What's in Store?

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The Trade Desk (TTD - Free Report) is set to release third-quarter 2020 results on Nov 5.

For the quarter, the company expects revenues between $177 million and $181 million, indicating 8-10% growth on a year-over-year basis.

The Zacks Consensus Estimate for the top line is currently pegged at $180.6 million, indicating 10% growth from the year-ago quarter’s reported figure.

However, the consensus mark for earnings has been unchanged at 48 cents per share over the past 30 days, suggesting a 36% decline from the figure reported in the year-ago quarter.

The company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 68.7%.

The Trade Desk Inc. Price and EPS Surprise

 

The Trade Desk Inc. Price and EPS Surprise

The Trade Desk Inc. price-eps-surprise | The Trade Desk Inc. Quote

 

Let’s see how things shaped up prior to this announcement.

Factors to Consider

The Trade Desk’s top line, in the third quarter, is expected to have benefited from the momentum in programmatic ad buying. Further, the emergence of digital content boosted the usage of the company’s inventory across all forms of ConnectedTV (“CTV”).

Notably, CTV spending grew more than 40% in the second quarter, which  is now expected to more than double in the third quarter.

Moreover, recovering ad demand and spending scenario is expected to have aided The Trade Desk’s top line in the September quarter.

Further, The Trade Desk’s solid partner base that includes the likes of FreeWheel (a Comcast company), Amazon, Disney, Spotify, Channel 4 (in England), ProSieben (in Germany), TF1 (in France), Baidu, Alibaba, Tencent (in China), TikTok and Samba TV (Australia) is noteworthy. Notably, through its partnerships, the company has been helping advertisers reach premium audiences globally.

Moreover, consistent customer retention is expected to have perked up the company’s revenues during the quarter. The Trade Desk’s customer-retention rate has remained more than 95%, as it has for the previous 5 years.

However, accelerated spending is expected to have hurt bottom-line growth in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

The Trade Desk has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Advanced Energy Industries (AEIS - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +1.75% and is #2 Ranked.

Yelp (YELP - Free Report) has an Earnings ESP of +33.96% and a Zacks Rank #3.

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