NasdaqGM:TTD

Stock Analysis Report

Executive Summary

The Trade Desk, Inc., a technology company, provides a self-service omnichannel software platform that enables clients to purchase and manage data-driven digital advertising campaigns in the United States and internationally.

Rewards

Trading at 14% below its fair value

Earnings are forecast to grow 26.52% per year

Earnings grew by 47.8% over the past year

Risk Analysis

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet with high growth potential.


Similar Companies

Alphabet

NasdaqGS:GOOG.L

Share Price & News

How has Trade Desk's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TTD's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.3%

TTD

-0.7%

US Software

-1.3%

US Market


1 Year Return

103.3%

TTD

38.6%

US Software

22.0%

US Market

Return vs Industry: TTD exceeded the US Software industry which returned 39.8% over the past year.

Return vs Market: TTD exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

TTDIndustryMarket
7 Day-0.3%-0.7%-1.3%
30 Day2.9%5.2%1.6%
90 Day33.4%16.3%8.9%
1 Year103.3%103.3%39.8%38.6%24.7%22.0%
3 Year808.8%808.8%136.1%126.7%49.4%39.7%
5 Yearn/a224.1%201.6%78.1%58.5%

Price Volatility Vs. Market

How volatile is Trade Desk's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Trade Desk undervalued compared to its fair value and its price relative to the market?

15.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TTD ($284.16) is trading below our estimate of fair value ($330.23)

Significantly Below Fair Value: TTD is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TTD is poor value based on its PE Ratio (129.4x) compared to the Software industry average (47.3x).

PE vs Market: TTD is poor value based on its PE Ratio (129.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TTD is poor value based on its PEG Ratio (4.9x)


Price to Book Ratio

PB vs Industry: TTD is overvalued based on its PB Ratio (23.9x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is Trade Desk forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

26.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TTD's forecast earnings growth (26.5% per year) is above the savings rate (1.7%).

Earnings vs Market: TTD's earnings (26.5% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TTD's revenue (22.5% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: TTD's revenue (22.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TTD's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Trade Desk performed over the past 5 years?

62.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TTD has high quality earnings.

Growing Profit Margin: TTD's current net profit margins (16%) are higher than last year (15.6%).


Past Earnings Growth Analysis

Earnings Trend: TTD's earnings have grown significantly by 62.7% per year over the past 5 years.

Accelerating Growth: TTD's earnings growth over the past year (47.8%) is below its 5-year average (62.7% per year).

Earnings vs Industry: TTD earnings growth over the past year (47.8%) exceeded the Software industry 20.8%.


Return on Equity

High ROE: TTD's Return on Equity (18.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Trade Desk's financial position?


Financial Position Analysis

Short Term Liabilities: TTD's short term assets ($1.2B) exceed its short term liabilities ($704.0M).

Long Term Liabilities: TTD's short term assets ($1.2B) exceed its long term liabilities ($175.6M).


Debt to Equity History and Analysis

Debt Level: TTD is debt free.

Reducing Debt: TTD had no debt 5 years ago.

Debt Coverage: TTD has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TTD has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TTD has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TTD's debt is covered by short term assets.


Next Steps

Dividend

What is Trade Desk's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TTD's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TTD's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TTD's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TTD's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TTD's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Trade Desk's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Jeff Green (42yo)

10.2yrs

Tenure

US$10,782,252

Compensation

Mr. Jeffrey Terry Green, also known as Jeff, is the Founder of The Trade Desk, Inc. and has been its Chief Executive Officer and president since November 2011. He serves as the Chairman of the Board at The ...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD10.78M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Jeff's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.8yrs

Average Tenure

42yo

Average Age

Experienced Management: TTD's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

3.4yrs

Average Tenure

44yo

Average Age

Experienced Board: TTD's board of directors are considered experienced (3.4 years average tenure).


Insider Trading

Insider Buying: TTD insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$6,165,58513 Nov 19
Kathryn Falberg
EntityIndividual
Role
Member of the Board of Directors
Non-Employee Director
Shares29,786
Max PriceUS$207.08
SellUS$342,08317 Jun 19
Vivian Yang
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer
Shares1,389
Max PriceUS$246.28
SellUS$99,52813 Jun 19
Eric Paley
EntityIndividual
Role
Member of the Board of Directors
Non-Employee Director
Shares400
Max PriceUS$248.82
SellUS$6,250,00012 Jun 19
eValue AG
EntityCompany
Shares25,000
Max PriceUS$250.00
SellUS$68,04311 Jun 19
Paul Ross
EntityIndividual
Shares275
Max PriceUS$247.43
SellUS$226,23122 May 19
Paul Ross
EntityIndividual
Shares1,114
Max PriceUS$203.08
SellUS$8,218,96413 Mar 19
Kathryn Falberg
EntityIndividual
Role
Member of the Board of Directors
Non-Employee Director
Shares40,000
Max PriceUS$205.47
SellUS$1,025,22827 Feb 19
Jeffrey Green
EntityIndividual
Role
Chief Executive Officer
Founder
Shares5,147
Max PriceUS$200.00

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.2%.


Management Team

  • Vivian Yang (52yo)

    Chief Legal Officer

    • Tenure: 3.4yrs
    • Compensation: US$4.16m
  • Ian Colley

    Vice President of Communications

    • Jeff Green (42yo)

      Founder

      • Tenure: 10.2yrs
      • Compensation: US$10.78m
    • Susan Vobejda (53yo)

      Chief Marketing Officer

      • Tenure: 2.2yrs
      • Compensation: US$4.16m
    • Vina Leite

      Chief People Officer

      • Tenure: 0.8yrs
    • Brian Stempeck (40yo)

      Chief Strategy Officer & Director

      • Tenure: 1yrs
      • Compensation: US$4.26m
    • DAve Pickles (41yo)

      Founder & CTO

      • Compensation: US$4.16m
    • Chris Toth

      Vice President of Investor Relations

      • Mason Burnham

        Senior Director of Communications

        • Blake Grayson

          Chief Financial Officer

          • Tenure: 0.2yrs

        Board Members

        • Lise Buyer (59yo)

          Director

          • Tenure: 0.8yrs
        • Kate Falberg (58yo)

          Non-Employee Director

          • Tenure: 3.4yrs
          • Compensation: US$561.94k
        • Thomas Falk (39yo)

          Non-Employee Director

          • Tenure: 7.7yrs
          • Compensation: US$505.97k
        • Jeff Green (42yo)

          Founder

          • Tenure: 10.2yrs
          • Compensation: US$10.78m
        • Eric Paley (43yo)

          Non-Employee Director

          • Tenure: 9.8yrs
          • Compensation: US$519.91k
        • Gokul Rajaram (45yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: US$851.49k
        • David Wells (48yo)

          Non-Employee Director

          • Tenure: 4.1yrs
          • Compensation: US$553.93k
        • Brian Stempeck (40yo)

          Chief Strategy Officer & Director

          • Tenure: 1yrs
          • Compensation: US$4.26m

        Company Information

        The Trade Desk, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: The Trade Desk, Inc.
        • Ticker: TTD
        • Exchange: NasdaqGM
        • Founded: 2009
        • Industry: Application Software
        • Sector: Software
        • Market Cap: US$12.645b
        • Shares outstanding: 45.13m
        • Website: https://www.thetradedesk.com

        Number of Employees


        Location

        • The Trade Desk, Inc.
        • 42 North Chestnut Street
        • Ventura
        • California
        • 93001
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        TTDNasdaqGM (Nasdaq Global Market)YesClass A Common StockUSUSDSep 2016
        TT8DB (Deutsche Boerse AG)YesClass A Common StockDEEURSep 2016
        0LF5LSE (London Stock Exchange)YesClass A Common StockGBUSDSep 2016
        TT8BRSE (Berne Stock Exchange)YesClass A Common StockCHCHFSep 2016
        TTDWBAG (Wiener Boerse AG)YesClass A Common StockATEURSep 2016
        TTD *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNSep 2016

        Biography

        The Trade Desk, Inc., a technology company, provides a self-service omnichannel software platform that enables clients to purchase and manage data-driven digital advertising campaigns in the United States and internationally. The company’s platform allows clients to manage integrated advertising campaigns in various advertising channels and formats, including display, video, audio, native and social, and on a multitude of devices, such as computers, mobile devices, and connected TV (CTV). It serves advertising agencies and other service providers for advertisers. The Trade Desk, Inc. was founded in 2009 and is headquartered in Ventura, California. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/26 01:45
        End of Day Share Price2020/01/24 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.