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The Trade Desk (TTD) Gains But Lags Market: What You Should Know

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In the latest trading session, The Trade Desk (TTD - Free Report) closed at $81.41, marking a +0.73% move from the previous day. This move lagged the S&P 500's daily gain of 0.74%.

Heading into today, shares of the digital-advertising platform operator had gained 15.94% over the past month, outpacing the Computer and Technology sector's loss of 0.81% and the S&P 500's gain of 1.34% in that time.

TTD will be looking to display strength as it nears its next earnings release. In that report, analysts expect TTD to post earnings of $0.16 per share. This would mark year-over-year growth of 23.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $283.6 million, up 31.23% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.17 billion, which would represent changes of +4.35% and +40.36%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TTD. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TTD is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that TTD has a Forward P/E ratio of 112.25 right now. For comparison, its industry has an average Forward P/E of 28.07, which means TTD is trading at a premium to the group.

Meanwhile, TTD's PEG ratio is currently 4.88. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Services stocks are, on average, holding a PEG ratio of 4.32 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TTD in the coming trading sessions, be sure to utilize Zacks.com.


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