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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 at $45.43 in the latest trading session, marking a +0.96% move from the prior day. This move outpaced the S&P 500's daily loss of 0.28%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq lost 0.14%.

Prior to today's trading, shares of the digital-advertising platform operator had gained 8.02% over the past month. This has lagged the Computer and Technology sector's gain of 8.21% and the S&P 500's gain of 8.35% in that time.

The Trade Desk will be looking to display strength as it nears its next earnings release, which is expected to be August 9, 2022. In that report, analysts expect The Trade Desk to post earnings of $0.21 per share. This would mark year-over-year growth of 16.67%. Meanwhile, our latest consensus estimate is calling for revenue of $365.25 million, up 30.46% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1 per share and revenue of $1.58 billion. These totals would mark changes of +9.89% and +31.86%, respectively, from last year.

Any recent changes to analyst estimates for The Trade Desk should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 3.45% lower. The Trade Desk is currently a Zacks Rank #4 (Sell).

Looking at its valuation, The Trade Desk is holding a Forward P/E ratio of 44.82. For comparison, its industry has an average Forward P/E of 22.09, which means The Trade Desk is trading at a premium to the group.

It is also worth noting that TTD currently has a PEG ratio of 1.87. 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. The Internet - Services industry currently had an average PEG ratio of 1.88 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 140, which puts it in the bottom 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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