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The Trade Desk (TTD) Gains As Market Dips: What You Should Know

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The Trade Desk (TTD - Free Report) closed the most recent trading day at $94.27, moving +1.84% from the previous trading session. This change outpaced the S&P 500's 0.3% loss on the day. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, added 0.33%.

Prior to today's trading, shares of the digital-advertising platform operator had lost 2.78% over the past month. This has lagged the Computer and Technology sector's gain of 0.63% and the S&P 500's gain of 3.11% in that time.

The Trade Desk will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.29, down 21.62% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $389.88 million, up 21.87% from the year-ago period.

TTD's full-year Zacks Consensus Estimates are calling for earnings of $0.79 per share and revenue of $1.19 billion. These results would represent year-over-year changes of +14.49% and +42.43%, respectively.

It is also important to note the recent changes to analyst estimates for The Trade Desk. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. The Trade Desk is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note The Trade Desk's current valuation metrics, including its Forward P/E ratio of 116.68. Its industry sports an average Forward P/E of 26.1, so we one might conclude that The Trade Desk is trading at a premium comparatively.

Also, we should mention that TTD has a PEG ratio of 4.86. 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. TTD's industry had an average PEG ratio of 3.58 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 194, which puts it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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