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TTD is benefiting from an expanding clientele. Over the past 12 months, its platform has been used by the largest 200 advertisers in the world to run their advertising campaigns.
A strong partner base that includes the likes of Disney (DIS - Free Report) , Comcast’s NBCU, Walmart (WMT - Free Report) , Amazon, Roku, Fox (FOXA - Free Report) , VerticalScope Holdings, foodpanda and LG Electronics has been a key catalyst.
TTD shares are expected to continue this upward trajectory, driven by these factors. Technical indicator is also bullish for The Trade Desk as the shares trade above the 50-day moving average, which indicates robust upward momentum and price stability.
YTD Performance
Image Source: Zacks Investment Research
However, the Value Style Score of D suggests a stretched valuation at this moment.
TTD stock is trading at a premium with a forward 12-month Price/Sales of 18.07X compared with the Zacks IT Services industry’s 5.98X.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
Hence, the question for investors is whether this is the right time to invest or if they should wait for a better opportunity. Let’s dig deep to find the investment opportunity present by TTD shares currently.
Strong CTV Demand to Aid Top-Line Growth
In the first quarter of 2024, TTD reported revenues of $491 million, up 28% year over year, driven by strong adoption of its CTV, retail media, Kokai and UID2 solutions. Adjusted EBITDA was $162 million.
In the near term, The Trade Desk is expected to benefit from strong spending in the CTV and retail media domains. CTV is its fastest-growing channel, as it reaches more than 90 million households and more than 120 million CTV devices.
TTD benefits from the growing demand for digital and programmatic advertisement. Total advertising addressable market is trending towards $1 trillion, which presents a significant growth opportunity for The Trade Desk. Expanding international business also bodes well for TTD’s prospects.
Strong momentum across TTD’s two initiatives, namely UID2 and OpenPass, which focus on identity and authentication in the post-cookie era, benefits from increased demand for its advertising services.
Expanding partner base has been a key catalyst for The Trade Desk. Integrations with Disney’s real-time ad exchange, which includes Hulu and Disney+ through TTD’s OpenPath technology, have been a game changer.
FOXA-TTD’s integration includes The Trade Desk’s UID2 identity solution and its OpenPath initiative across Fox's AdRise ad platform.
2024 Estimate Revision Shows Upward Movement
The Trade Desk estimates second-quarter revenues to be at least $575 million, suggesting growth of approximately 24% on a year-over-year basis. Adjusted EBITDA is expected to be approximately $223 million.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $577.55 million, indicating year-over-year growth of 24.41%. The consensus mark for earnings is pegged at 36 cents per share, unchanged over the past 60 days.
For the full year, the estimate revision is positive, indicating the benefits of strong demand for its solutions. The Zacks Consensus Estimate for TTD’s 2024 revenues is pegged at $2.42 billion, indicating year-over-year growth of 24.49%. The consensus mark for earnings is pegged at $1.57 per share, up a couple of cents over the past 60 days.
Estimate Revision Positive
Image Source: Zacks Investment Research
Strong Liquidity Position
The Trade Desk’s strong liquidity position is noteworthy. As of Mar 31, 2024, it had cash, cash equivalents and short-term investments of $1.42 billion.
Free cash flow was $176 million in the first quarter.
The strong liquidity position helps TTD to sustain its share buyback program. As of Mar 31, 2024, the company had $575 million available and authorized for repurchases.
Conclusion
The Trade Desk’s strong portfolio and expanding partner base are positive. The Growth Style Score of A is hard to ignore for investors.
The Trade Desk currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. However, investors who already own the stock might expect the company’s growth prospects to be rewarding over a longer term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Trade Desk (TTD) Up 39.6% YTD: Is the Stock Worth Buying?
The Trade Desk’s (TTD - Free Report) shares have gained 39.6% year to date, outperforming the Zacks Computer & Technology sector’s 21.5% gain and the Zacks Internet Services return of 22.8%.
TTD is benefiting from an expanding clientele. Over the past 12 months, its platform has been used by the largest 200 advertisers in the world to run their advertising campaigns.
A strong partner base that includes the likes of Disney (DIS - Free Report) , Comcast’s NBCU, Walmart (WMT - Free Report) , Amazon, Roku, Fox (FOXA - Free Report) , VerticalScope Holdings, foodpanda and LG Electronics has been a key catalyst.
TTD shares are expected to continue this upward trajectory, driven by these factors. Technical indicator is also bullish for The Trade Desk as the shares trade above the 50-day moving average, which indicates robust upward momentum and price stability.
YTD Performance
However, the Value Style Score of D suggests a stretched valuation at this moment.
TTD stock is trading at a premium with a forward 12-month Price/Sales of 18.07X compared with the Zacks IT Services industry’s 5.98X.
P/S Ratio (F12M)
Hence, the question for investors is whether this is the right time to invest or if they should wait for a better opportunity. Let’s dig deep to find the investment opportunity present by TTD shares currently.
Strong CTV Demand to Aid Top-Line Growth
In the first quarter of 2024, TTD reported revenues of $491 million, up 28% year over year, driven by strong adoption of its CTV, retail media, Kokai and UID2 solutions. Adjusted EBITDA was $162 million.
In the near term, The Trade Desk is expected to benefit from strong spending in the CTV and retail media domains. CTV is its fastest-growing channel, as it reaches more than 90 million households and more than 120 million CTV devices.
TTD benefits from the growing demand for digital and programmatic advertisement. Total advertising addressable market is trending towards $1 trillion, which presents a significant growth opportunity for The Trade Desk. Expanding international business also bodes well for TTD’s prospects.
Strong momentum across TTD’s two initiatives, namely UID2 and OpenPass, which focus on identity and authentication in the post-cookie era, benefits from increased demand for its advertising services.
Expanding partner base has been a key catalyst for The Trade Desk. Integrations with Disney’s real-time ad exchange, which includes Hulu and Disney+ through TTD’s OpenPath technology, have been a game changer.
FOXA-TTD’s integration includes The Trade Desk’s UID2 identity solution and its OpenPath initiative across Fox's AdRise ad platform.
2024 Estimate Revision Shows Upward Movement
The Trade Desk estimates second-quarter revenues to be at least $575 million, suggesting growth of approximately 24% on a year-over-year basis. Adjusted EBITDA is expected to be approximately $223 million.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $577.55 million, indicating year-over-year growth of 24.41%. The consensus mark for earnings is pegged at 36 cents per share, unchanged over the past 60 days.
For the full year, the estimate revision is positive, indicating the benefits of strong demand for its solutions. The Zacks Consensus Estimate for TTD’s 2024 revenues is pegged at $2.42 billion, indicating year-over-year growth of 24.49%. The consensus mark for earnings is pegged at $1.57 per share, up a couple of cents over the past 60 days.
Estimate Revision Positive
Strong Liquidity Position
The Trade Desk’s strong liquidity position is noteworthy. As of Mar 31, 2024, it had cash, cash equivalents and short-term investments of $1.42 billion.
Free cash flow was $176 million in the first quarter.
The strong liquidity position helps TTD to sustain its share buyback program. As of Mar 31, 2024, the company had $575 million available and authorized for repurchases.
Conclusion
The Trade Desk’s strong portfolio and expanding partner base are positive. The Growth Style Score of A is hard to ignore for investors.
The Trade Desk currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. However, investors who already own the stock might expect the company’s growth prospects to be rewarding over a longer term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.