Trade Desk (TTD): Evaluating Valuation After Audience Unlimited Launch and DIRECTV Partnership Announcements

The Trade Desk (TTD) recently revealed two major initiatives: the launch of Audience Unlimited, an AI-powered data marketplace designed to simplify advertiser access to third-party data, and a strategic partnership with DIRECTV for a custom Ventura TV OS integration.

See our latest analysis for Trade Desk.

After unveiling Audience Unlimited and the DIRECTV partnership, Trade Desk enjoyed a notable surge, with shares jumping 6.6% upon the news. However, this recent excitement comes after a rocky year, as its 1-year total shareholder return is down 0.5%, and momentum has faded due to competitive pressures and industry headwinds affecting sentiment. Investors seem increasingly optimistic about long-term growth potential with these latest platform moves, though the stock’s performance remains mixed compared to tech peers.

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With expectations running high after these announcements, the key question now is whether Trade Desk’s stock is trading at a bargain given its growth prospects, or if the market has already factored in years of future gains.

Most Popular Narrative: 29.8% Undervalued

Trade Desk’s most widely followed narrative places its fair value at $72.52, noticeably above the last close of $50.88. This suggests meaningful upside if these assumptions prove accurate. The debate centers on rapid platform innovation versus increased industry scrutiny.

The full rollout and high adoption of the new AI-powered Kokai platform, including new tools like Deal Desk and supply chain innovation (OpenPath, Sincera integration), is already leading to more than 20% better campaign performance and causing existing clients to increase spend at a much faster rate. As the remaining clients transition and the product matures, this could drive significant increases in platform efficiency, gross margin, and average revenue per client.

Read the complete narrative.

Want to know why analysts are betting on Trade Desk’s transformation? Buried in the narrative are aggressive growth estimates and a sky-high profit multiple rarely seen outside the top tech sector. Which projections inform that price? Discover the financial logic behind the forecast.

Result: Fair Value of $72.52 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, major client concentration and persistent competition from walled gardens could quickly challenge these optimistic growth assumptions for Trade Desk.

Find out about the key risks to this Trade Desk narrative.

Another View: Peers and Ratios Tell a Different Story

While the main narrative points to Trade Desk being undervalued, traditional valuation signals paint a riskier picture. Its price-to-earnings ratio is 59.6x, notably higher than the US Media industry average of 20.3x and its peers’ average of 33.5x. Even compared to its fair ratio of 30.5x, shares look expensive, suggesting investors are pricing in a lot of future success. Could this premium be justified, or is there more risk than meets the eye?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Trade Desk Narrative

If the main story doesn’t quite fit your take or you want to test your own data assumptions, you can create a fresh narrative for Trade Desk in just a few minutes. Do it your way

A great starting point for your Trade Desk research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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