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TTD

Trade Desk NasdaqGM:TTD Stock Report

Last Price

US$61.80

Market Cap

US$31.1b

7D

-1.8%

1Y

-9.5%

Updated

05 Oct, 2022

Data

Company Financials +
TTD fundamental analysis
Snowflake Score
Valuation2/6
Future Growth6/6
Past Performance2/6
Financial Health6/6
Dividends0/6

TTD Stock Overview

Trade Desk, Inc. operates as a technology company in the United States and internationally.

The Trade Desk, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Trade Desk
Historical stock prices
Current Share PriceUS$61.80
52 Week HighUS$114.09
52 Week LowUS$39.00
Beta1.93
1 Month Change0.86%
3 Month Change35.74%
1 Year Change-9.50%
3 Year Change223.51%
5 Year Change852.82%
Change since IPO1,953.16%

Recent News & Updates

Sep 27

The Trade Desk: Not Immune

Summary The Trade Desk hasn't seen its EPS estimates get downwards adjusted. This strikes me as odd. I believe that investors are being lulled into a false sense of safety. The whole ad tech has taken its medicine. I believe that The Trade Desk's Q4 guidance could deliver negative surprises to investors. In a time of 0% interest rates, this stock made a lot more sense. Bear market rallies are investors' number one enemy right now. Investment Thesis The Trade Desk (TTD) has not seen analysts downward revising their EPS estimates for Q4 and early 2023. Even though EPS estimates for its peers have already moved lower. TTD has been relatively immune to the bear market that has seen countless names fall substantially more than 50% from their highs. With this in mind, I don't believe that paying more than 40x EBITDA for TTD makes sense. Bear Market Rallies We are likely in the middle of a bear market. Along the way, there are going to be periods where stocks get oversold only to pull back and trap bulls. Stocks rarely move in a straight line, either up or down. There are vicissitudes along the way that trick investors that don't fully buy into the overarching narrative. The bear market rallies happen when stocks have moved too quickly into negative territory. For example, back in the 2000s, the Nasdaq (QQQ) had 7 bear market rallies that saw stocks jump 50%, even though the long-term trend was lower over a period of years. Those rallies are meant to erode investors' capital. Only when investors are sufficiently burnt to stop throwing good capital after bad, can the market stabilize. Looking Ahead, It's Going To Get Tough Moving on, I argue that Q4 is going to be tough for TTD, despite political spending percolating into its business. More importantly, as we look out to early 2023, there are a lot more questions than answers. Investors are going to navigate a period of substantial uncertainty. And even though TTD could well come out the other side with significant market share gains, I don't believe that today's investors will benefit. And I'll get to why momentarily, before that, let's address near-term earnings expectations. TTD Earnings Expectations Need To Come Down In the graphic below we can see several straight lines for TTD earnings expectations. TTD analysts' consensus earnings What this tells you is that earnings have not come down. In fact, what you can clearly see is that Q4 and Q1 2023 EPS estimates, light blue and lilac respectively, have actually come up slightly in the past several months. Consequently, I argue that the Street is widely off the mark here. Look no further than every other ad tech and advertising company in the public market. The market is the best leading indicator that you need to know that everything is not fine in the advertising sector. Concurrently, I think analysts are stuck with their unreasonable expectations! Consider a more widely followed name, such as Alphabet (GOOGL)(GOOG). GOOG analysts' consensus earnings And one may make the case that Alphabet is a more widely followed name, so there's a bigger cohort of analysts, which ultimately leads to better insights into EPS forecasts. And I would retort, precisely! Analysts are being too flat-footed to figure out that TTD isn't going to thrive in the coming quarters in my opinion, as much as analysts expect. Essentially, I believe that TTD is likely to deliver to investors a large negative surprise in its upcoming Q3 quarterly earnings season. Here's another point of reference, consider Digital Turbine (APPS). APPS analysts' consensus earnings And we can make the argument that Digital Turbine is no match for TTD. Perhaps it could be true that Digital Turbine's analysts are too bearish on its prospects. But the fact that there's been no adjustment at all on TTD's EPS quarterly estimates, doesn't this strike one as odd? As I look around I see countless advertising businesses referencing a lengthened sales cycle, as well as a slowing economy, and the impact of higher interest rates. But no adjustment for TTD? Seriously? Bull Case Too Far Stretched The reason why TTD has remained so resilient is that its EBITDA is so strong. Indeed, in a time where countless other businesses are only marginally EBITDA profitable, TTD stands tall.

Sep 23
Best Performing Stocks

Best Performing Stocks

August saw some substantial gainers, returning anywhere from 30% to 95%. In our analysis, we will re-cap key companies that saw price increases and have a market cap higher than $5b.

Sep 01
Calculating The Intrinsic Value Of The Trade Desk, Inc. (NASDAQ:TTD)

Calculating The Intrinsic Value Of The Trade Desk, Inc. (NASDAQ:TTD)

Today we will run through one way of estimating the intrinsic value of The Trade Desk, Inc. ( NASDAQ:TTD ) by taking...

Aug 26

The Trade Desk Is Ready To Erupt Globally

Summary The time for walled gardens is probably over, given the massive global demand for an Open-Internet environment. TTD has shown massive relevance in the CTV market, due to the pandemic boom and streaming stickiness post-reopening cadence. With a $750B TAM in global ad spending, TTD would be well poised for massive growth and long-term stock appreciation in the future. Investors, do not miss your chance to load up at any dips. Investment Thesis It is evident by now that the COVID-19 pandemic has been more than good to Trade Desk, Inc. (TTD), given the massive growth in its revenues and gross profits by now. With the global digital advertising and marketing spending expected to grow from $350B in 2020 to $786.2B in 2026 at a CAGR of 14.44%, there is every reason for TTD's success ahead indeed post-reopening cadence, since the global connected TV advertising market is also expected to expand from $16.56B in 2021 to $32.56B in 2026 at a CAGR of 14.48%. Its market share in the ad-tech segment has also grown impressively, from 8% in Q1'22 to 9.24% as of August 2022. With the aid from increased political ad spending surrounding Mid-Term Elections in November, its long-term partnership with Disney (DIS) (and speculatively with Netflix (NFLX) in the future), and the massive growth in shopper marketing in the global e-commerce space, amongst others, we expect to see an easy upwards rerating of TTD's revenue and profitability growth ahead. Therefore, long-term investors should simply sit tight and enjoy the ride, since we expect its CTV segment to outperform despite the ad-pocalyse reported by Alphabet (GOOG) and Meta (META). Stellar indeed, due to TTD's long runway for growth in the massive Total Addressable Market of $750B in global ad spending. TTD's Management Has Proven To Be More Than Stellar Thus Far S&P Capital IQ In FQ2'22, TTD reported revenues of $377M and gross margins of 82.1%, representing a massive growth of 34.6% though mostly inline YoY, respectively. Otherwise, a remarkable increase of 4.2 percentage points in gross margins from FQ2'19 levels, despite the rising inflation in current worsening macroeconomics. In the meantime, the company's profitability has taken a hit, with an EBITDA of $14M and an EBITDA margin of 0.5% in FQ'22, representing a YoY decline of 80.8% and 25.6 percentage points, respectively. S&P Capital IQ This is mostly attributed to TTD's elevated operating expenses of $307M in FQ2'22, representing an immense increase of 83.6% YoY and 331.1% from FQ2'19 levels. This has directly impacted the ratio of its growing sales to 81.6% of its revenues and 99.4% of its gross profits in FQ2'22, compared to 59.7%/ 73% in FQ2'21 and 57.9%/ 74.4% in FQ2'19, respectively. Thereby, noticeably affecting TTD's operating income by -97.1% YoY, from $61.95M in FQ2'21 to $1.74M in FQ2'22. S&P Capital IQ However, it is also important to note that part of the higher operating expenses was attributed to TTD's elevated Stock-Based Compensation (SBC) expenses of $125.2M in FQ2'22, representing a massive increase of 276.9% YoY. In addition, the company reported $455.51M in SBC expenses for the past three quarters, up 345% from $132.01M three quarters earlier. Therefore, naturally impacting its profitability at the same time. Nonetheless, it is also essential to note that despite the massive growth in its SBC expenses, TTD's diluted shares outstanding have remained stable thus far, with 486.3M reported in FQ2'22. Therefore, asserting confidence in its long-term investors for now. S&P Capital IQ Fortunately, TTD's Free Cash Flow ((FCF)) generation remains stellar after adjusting for its SBC expenses. By the last twelve months (LTM), the company reported $482.19M in FCF and 34.7% in FCF margins, representing a massive increase of 48.9% YoY and 31 percentage points from FY2019 levels, respectively. Thereby, contributing to TTD's growing war chest of $932.7M in cash and equivalents on its balance sheet by FQ2'22. Stellar indeed, since TTD reports $364.59M of net PPE assets and $48.85M of capital expenditure in the LTM, representing an increase of 53.5% and 36.8% from FY2019 levels, respectively, without the need to rely on any long-term debt at the moment. Therefore, TTD seemed well poised for growth and expansion ahead, despite the normalization in ad spending and global cost-cutting efforts from major tech companies. CEO Jeff Green of Trade Desk, said: More of the world's leading brands are signing major new or expanded long-term agreements with The Trade Desk, which speaks to the innovation and value that our platform provides compared to the limitations of walled gardens. This trend also gives us confidence that we will continue to gain market share in any market environment. (Seeking Alpha) Mr. Market Is Very Optimistic About TTD's Forward Profitability S&P Capital IQ Over the next three years, TTD is expected to report revenue and EBITDA growth at an excellent CAGR of 28.42% and 83.92%, respectively. These numbers represent an apparent acceleration in its EBITDA growth, compared to pre-pandemic levels of 31.11% and pandemic levels of 12.46%. Analysts are also highly confident about its profitability, given the massive growth in its EBITDA margins from 17% in FY2019 to 39.9% in FY2024.

Shareholder Returns

TTDUS MediaUS Market
7D-1.8%0.4%1.9%
1Y-9.5%-43.7%-18.8%

Return vs Industry: TTD exceeded the US Media industry which returned -43.2% over the past year.

Return vs Market: TTD exceeded the US Market which returned -18.2% over the past year.

Price Volatility

Is TTD's price volatile compared to industry and market?
TTD volatility
TTD Average Weekly Movement13.2%
Media Industry Average Movement7.7%
Market Average Movement7.0%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.9%

Stable Share Price: TTD is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 13% a week.

Volatility Over Time: TTD's weekly volatility (13%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
20091,967Jeff Greenhttps://www.thetradedesk.com

Trade Desk, Inc. operates as a technology company in the United States and internationally. The company operates a self-service cloud-based platform that allows buyers to create, manage, and optimize data-driven digital advertising campaigns across various ad formats and channels, including display, video, audio, native, and social on various devices, such as computers, mobile devices, and connected TV. It also provides data and other value-added services.

The Trade Desk, Inc. Fundamentals Summary

How do Trade Desk's earnings and revenue compare to its market cap?
TTD fundamental statistics
Market CapUS$31.08b
Earnings (TTM)US$33.75m
Revenue (TTM)US$1.39b

894.1x

P/E Ratio

21.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TTD income statement (TTM)
RevenueUS$1.39b
Cost of RevenueUS$251.63m
Gross ProfitUS$1.14b
Other ExpensesUS$1.10b
EarningsUS$33.75m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.069
Gross Margin81.88%
Net Profit Margin2.43%
Debt/Equity Ratio0%

How did TTD perform over the long term?

See historical performance and comparison