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The company 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 $577.51 million, indicating year-over-year growth of 24.40%. The consensus mark for earnings is pegged at 36 cents per share, unchanged over the past 60 days, suggesting 28.57% year-over-year growth.
TTD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same on one occasion, with an earnings surprise of 8.75%, on average.
Let’s see how things have shaped up for this announcement.
Factors to Note
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.
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.
The Trade Desk is expected to benefit from strong spending in the CTV and retail media domains in the to-be-reported quarter. CTV is its fastest-growing channel, as it reaches more than 90 million households and more than 120 million CTV devices.
TTD Trading at a Premium
TTD shares have gained 15.4%, outperforming the Zacks Computer & Technology sector’s return of 14.9% and the S&P 500’s 12.4%.
Year-to-Date Performance Chart
Image Source: Zacks Investment Research
However, the Value Style Score of F suggests a stretched valuation for The Trade Desk at this moment, which makes it a risky bet for risk-averse investors.
TTD stock is trading at a premium with a forward 12-month Price/Sales of 14.85X compared with the Zacks IT Services industry’s 5.38X.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
Strong CTV Demand to Aid Top-Line Growth
TTD benefits from the growing demand for digital and programmatic advertisement. Total advertising addressable market is trending toward $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.
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.
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.
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 and the company’s growth prospects are rewarding over a longer term.
However, stretched valuation is a concern for investors. Technical indicator is bearish for The Trade Desk as the shares trade below the 50-day moving average.
Image: Bigstock
The Trade Desk (TTD) Stock: Buy or Sell Before Q2 Earnings?
The Trade Desk (TTD - Free Report) is set to release its second-quarter 2024 results on Aug 8.
The company 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 $577.51 million, indicating year-over-year growth of 24.40%. The consensus mark for earnings is pegged at 36 cents per share, unchanged over the past 60 days, suggesting 28.57% year-over-year growth.
TTD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same on one occasion, with an earnings surprise of 8.75%, on average.
The Trade Desk Price and EPS Surprise
The Trade Desk price-eps-surprise | The Trade Desk Quote
Let’s see how things have shaped up for this announcement.
Factors to Note
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.
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.
The Trade Desk is expected to benefit from strong spending in the CTV and retail media domains in the to-be-reported quarter. CTV is its fastest-growing channel, as it reaches more than 90 million households and more than 120 million CTV devices.
TTD Trading at a Premium
TTD shares have gained 15.4%, outperforming the Zacks Computer & Technology sector’s return of 14.9% and the S&P 500’s 12.4%.
Year-to-Date Performance Chart
Image Source: Zacks Investment Research
However, the Value Style Score of F suggests a stretched valuation for The Trade Desk at this moment, which makes it a risky bet for risk-averse investors.
TTD stock is trading at a premium with a forward 12-month Price/Sales of 14.85X compared with the Zacks IT Services industry’s 5.38X.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
Strong CTV Demand to Aid Top-Line Growth
TTD benefits from the growing demand for digital and programmatic advertisement. Total advertising addressable market is trending toward $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.
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.
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.
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 and the company’s growth prospects are rewarding over a longer term.
However, stretched valuation is a concern for investors. Technical indicator is bearish for The Trade Desk as the shares trade below the 50-day moving average.
TTD Trades Below 50-Day SMA
Image Source: Zacks Investment Research
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. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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