The Trade Desk, Inc. (is an algorithmic, real-time bidding advertising tech firm built for the digital age. TTD Quick Quote TTD - Free Report)
The company allows clients to utilize its cloud-based platforms to create, manage, and optimize data-driven digital ad campaigns across an array of channels, apps, and websites, on mobile devices, connected TVs, audio, and nearly anywhere else one might come across a digital ad. TTD has benefitted from the streaming TV age that spurred even more ad dollars to shift to digital—which is projected to grab nearly 70% market share in the next several years as legacy media fades further.
Think about how many people pay monthly subscription fees to have ad-free content on Netflix (
NFLX Quick Quote NFLX - Free Report) , Disney+ ( DIS Quick Quote DIS - Free Report) , and countless platforms. This heightens the need for tech-focused, data-driven ad solutions to reach consumers wherever they might be.
TTD was temporarily impacted by the coronavirus-based pullback in ad spending, but its revenue still climbed 27% last year. The company has also posted strong results so far this year and TTD executives are very bullish on their growth runway within streaming and beyond.
Zacks estimates call for TTD’s fiscal year sales to climb over 40% to $1.17 billion, with FY22 set to jump another 29% higher. Its adjusted EPS are expected to pop 4% and 22%, respectively over this stretch. TTD’s overall earnings outlook is up big since its last report and it’s crushed our bottom-line estimates by an average of 91% in the trailing four quarters.
Image Source: Zacks Investment Research
TTD shares have skyrocketed over 3,000% in the past five years and 270% in the last two, to continue to blow away other firms that benefit from digital ad spending such as Roku (
ROKU Quick Quote ROKU - Free Report) and giants like Alphabet ( GOOGL Quick Quote GOOGL - Free Report) . Luckily for investors who might have missed out, The Trade Desk has cooled down to lag the S&P 500 in the trailing 12 months up 20% and it’s down 7% in 2021 vs. its industry’s 40% average jump.
TTD currently hovers 22% below its records at around $74 a share, as of morning trading Thursday. The stock broke above its 50-day and 200-day moving averages in the early part of last month and it’s bounced in between these two key technical levels recently. And it hovers below neutral RSI levels of 50 at 47, even as the Nasdaq 100-tracking QQQ ETF climbs further into overbought territory (above 70).
In terms of valuation, The Trade Desk trades at a 40% discount to its own year-long highs at 24.5X forward 12-months sales. This still might be a little rich for many people and it trades at sky-high forward earnings multiples. Yet, its PEG ratio, which factors in growth, is far more reasonable and comes in well below many other high-flyers at 5.8 (or 60% below its own highs).
The Trade Desk lands a Zacks Rank #3 (Hold) at the moment heading into its Q3 financial release on Monday, November 8. Wall Street remains largely bullish on the ad tech stock, with nine of the 13 brokerage recommendations Zacks has coming in at “Strong Buys.”
Plus, its $90.64 a share Zacks consensus price target marks 20% upside to its current levels. And executives are continuing on their path to make TTD “the default DSP (Demand-side platform) for the open internet.