Bull of the Day: The Trade Desk (TTD)

The Trade Desk TTD is the $34 billion leader in digital advertising, as an innovative demand-side platform (DSP) outside the “walled gardens” of Google and Facebook.



I call them the “CME of Advertising” because of their programmatic platform which enables all ad buyers to set up algorithms based on customer data and targeting — and then have the program bid for ad space, in real-time, across the web and connected-TV.



These ad buying programs can then run automatically and continuously according to the buyer’s budget, geographies and time zones — just like the modern hedge fund “algos” that scour the financial markets for trading opportunities.



This eliminates time-consuming “insertion orders” for ad buying as the platform serves the ad buyer with instant access to consumer data and markets on endless internet real estate and Connected-TV (C-TV) platforms like Roku ROKU.



Dominant Tech Platforms Don’t Come Cheap



After another strong beat-and-raise quarterly report on August 9, TTD shares reached for their old highs above $90 but have fallen into a downtrend on the overall pullback in software valuations.



TTD trades for just over 22 times next year’s projected sales of $1.5 billion. That’s rich, but that topline is growing at 40% this year, and the consensus of 30% growth next year I expect will rise.



Plus, since TTD has been consistently profitable with its “exchange model,” when you add the revenue and the profit profiles together, you get a company trading solidly in the upper realms of the “Rule of 40” hurdle for software investors.



To learn more about that metric, see my most recent Cook’s Kitchen dive here…



Software Valuations: How to Use the Rule of 40



Since the recent TTD report changed the minds of a lot of Wall Street analysts, I’d also bet good money that the top institutional holder who bought 11 million shares in Q2, Scottish investment fund Baillie Gifford, is probably buying more every chance they get under $70.



Those Scottish Warlords of Investing are all about disruptive technology platforms with 10 to 20-year growth trajectories.



Quarter Details and Outlook



The Trade Desk (TTD) delivered EPS of $0.18, beating the Zacks Consensus Estimate of $0.13 per share. This compares to EPS of $0.09 in the year-ago quarter. These figures are adjusted for non-recurring items.



This beat represented an earnings surprise of 38.46%. Last quarter, TTD “wowed the crowd” even more with a positive surprise of 75%.



TTD posted revenues of $280 million for Q2, surpassing the Zacks Consensus Estimate by 7%, and clobbering the year-ago revenues of $139.36 million by over 100%.



In company guidance, The Trade Desk sees Q3 revenue of at least $282 million, vs. the consensus of about $275M. TTD also forecast Q3 adjusted EBITDA of $100M.



In addition to highlighting the launch of their new service Solimar, on the conference call TTD also revealed that in the second half of the year, Walmart will launch a new DSP, which integrates Walmart shopper data and is built on Trade Desk’s platform.



Solimar > Covid



Maybe some of the pessimism around TTD shares at $90 after the report was due to company comments like this…



“Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or additional shelter-in-place orders that may or may not occur.”



To me that sounds like every business on the planet right now. And yet The Trade Desk is a revolutionary platform going into a global advertising market that is headed toward $1 trillion in transactions.



Imagine being a clean, fast, data-driven toll booth for that TAM (total addressable market). That’s why I call them the “CME of Advertising.”



And Solimar is just the ticket for launch. Here’s how they describe the platform’s features for the DSP market…



Brands and marketers are pioneering a new marketing normal, one that requires an innovative approach to data-driven advertising. That’s why we created Solimar. Our new platform completely reimagines the media buying experience, putting your business objectives front and center, unleashing the full power of your first-party data, and giving you access to a powerful marketplace of measurement partners.



And here was CEO Jeff Green talking about the exciting opportunities available as they give marketers more useful data — and let’s them securely bring their own data — without violating privacy concerns of consumers…



“Our growth speaks to The Trade Desk’s position as the default DSP for the open internet. Nowhere is this more apparent than in Connected TV, as more premium streaming inventory becomes available to meet growing marketer demand for data-driven TV advertising. From a customer perspective, more of the world’s leading brands, and their agencies, joined our platform, or expanded their relationship with us.



“We also recently launched our new trading platform, Solimar, the biggest product launch in our company’s history. Solimar allows advertisers to take advantage of many opportunities in front of them today, with features such as simple and secure onboarding of first-party data; the industry’s most advanced cross-channel measurement marketplace; and advanced, multi-level goal-setting which allows our KOA AI technology to optimize campaigns for the trader.”



Analysts Boost Estimates and Price Targets



After the report and conference call, analysts moved their EPS targets much higher. This year’s consensus jumped 22% from $0.64 to $0.78, representing steady 13% EPS growth.



And here were some select comments and big price target (PT) bumps…



Truist analyst Youssef Squali raised his PT on The Trade Desk to $92 from $62, noting the company posted solid Q2 results and Q3 guidance and “while visibility beyond next quarter is clouded by the re-opening and variability,” the first half performance gives him confidence in the company’s ability to exceed Street expectations.



With 2021-2026 estimated sales CAGR of about 30%, valuation on Trade Desk looks compelling to the Truist analyst.



KeyBanc analyst Justin Patterson raised his PT on The Trade Desk to $90 from $74, as the analyst believes TTD continues to benefit from the advertising recovery, with particular strength in C-TV and international. Coupled with the new Solimar update and efforts to improve data onboarding and efficacy, Patterson thinks high 20% to 30% y-o-y revenue growth is very achievable over the medium-term.



DA Davidson analyst Tom White raised the firm’s PT on TTD to $95 from $65, citing the company’s Q2 results and Q3 guidance that handily beat estimates. White believes The Trade Desk’s long-term global opportunity in digital programming is as compelling as ever and that C-TV and online video remain the key drivers of Trade Desk’s growth.

Scottish Warlords of Investing, Click to get this free report, Zacks Investment Research

– Zacks

White added that the decision by Google to delay the deprecation of third-party cookies in Chrome provides the company with even more time to prepare for this change.



Oppenheimer analyst Jason Helfstein raised his PT on The Trade Desk to $95 from $85, arguing that Q2 results reflect TTD’s ability to capitalize on linear TV budget shifting to C-TV. Helfstein adds that strong international growth for Trade Desk continues, with CTV revenue rising over 10-times in AMEA.



Susquehanna analyst Shyam Patil raised his PT on The Trade Desk to $105 from $100, calling it a “must own” stock as he continues to view the company as a multi-year growth story with several key growth drivers in play, notably CTV — especially internationally — and shopper marketing via Solimar.



Google’s Cookie Twilight Won’t Upset This New Monster



And here was one stick in the mud who reluctantly raised estimates…



Citi analyst Nicholas Jones raised the firm’s PT on The Trade Desk to $85 from $60, but kept a Neutral rating on the shares. The analyst moved estimates higher on the better Q2 results and outlook than he originally expected. Jones views Trade Desk as a “dominant and best-in-class” ad-tech player, but continues to see risk associated with technology disruption and privacy regulation.



Obviously, he’s talking about Google’s plan to phase out 3rd-party cookies. But TTD is already planning to innovate past the need for Google’s cookies, especially as they want to be agnostic about platforms and hyper-vigilant with consumer data privacy issues.



In the end, I’m betting on TTD to figure out the best ways to track data on consumer shopping and buying behavior without violating their privacy.



Disclosure: I own shares of TTD for the Zacks TAZR Trader portfolio.


Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

The Trade Desk Inc. (TTD): Free Stock Analysis Report

 

Roku, Inc. (ROKU): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research

Internet Explorer Channel Network
News Related

OTHER NEWS

How community leaders are bringing personal finance into the classroom

At CNBC's America's Financial Education town hall, community leaders from across the nation were honored for their commitment to educating students about financial literacy. Currently, only 21 states require financial literacy to ... Read more »

Meet the financial literacy leaders making a difference in their communities

Throughout Hispanic Heritage month, CNBC, in partnership with Acorns, asked communities across America to nominate local financial literacy leaders who demonstrated a commitment to educating those who are often left ... Read more »

Spice Money strengthens its senior leadership team

Rural fintech company Spice Money has announced the appointment of four senior leaders. This includes Vivek Venkatesan as chief financial officer for Spice Money, Sameer Nagpal as chief business officer ... Read more »

A divergence between the two largest chipmakers, Nvidia and Taiwan Semi, could widen, traders say

It's a tale of two chipmakers in the semiconductor space. Nvidia, the largest stock in the SMH semiconductor ETF, hit records Tuesday and rallied another 7% on hopes Facebook's investment ... Read more »

Op-ed: Opportunity zone funds are more about hype than substance when it comes to tax planning

Reza Estakhrian | The Image Bank | Getty Images Opportunity zone fund investments are back. Granted, they never went away, but after generating a great deal of attention a few ... Read more »

Martin Lewis gives 21-day warning to all UK drivers over potential saving of £500

A 21-day warning has been issued to all UK drivers by Money Saving Expert Martin Lewis, who warns they could lose out on as much as £500 if they don’t ... Read more »

Inflation to soar to 4% this winter in grim Budget announcement for families

Inflation will soar to 4% this winter spelling a cost of living squeeze for millions of families, the Budget predicted today. Chancellor Rishi Sunak said the Office for Budget Responsibility ... Read more »

Budget 2021 – live: Sunak unveils spending pledges as inflation set to increase to 4%

LIVE – Updated at 13:06 © PA budget sunak 2.jpg Rishi Sunak has said inflation is expected to hit 4 per cent in the year ahead, as he delivers his ... Read more »

College tuition is now rising at a rate lower than inflation

College gets more and more expensive every year. And yet, amid continued falling enrollment due to Covid, this year's increases in tuition and fees are very low by historic standards, ... Read more »

Robinhood drops 10% to below IPO price as investors worry about bleak outlook

Pavlo Gonchar | LightRocket | Getty Images Shares of Robinhood are getting crushed in premarket trading on Wednesday following a worrisome earnings report from the newly public brokerage. Robinhood shares ... Read more »

Martin Lewis issues warning to households as energy firms tell customers to fix

Martin Lewis has issued a warning to millions of households – telling them not to lock into a fixed deal right now. The MoneySavingExpert is instead telling Brits to “do ... Read more »

Budget 2021 summary: key changes and highlights at a glance

The UK economy is entering a “new age of optimism”, Rishi Sunak will declare today at the Budget as he is provided extra wiggle room on spending by a far ... Read more »

Budget 2021 latest news: Rishi Sunak expected to slash beer duty - live updates

© AFP The Budget begins: Rishi Sunak has left the building – AFP Markets blog live: Budget latest from our business desk How NHS Test & Trace frittered away £37bn ... Read more »

Stock futures are mostly flat after Dow, S&P close at records

U.S. stock index futures were little changed during early morning trading on Wednesday after the Dow and S&P closed at record highs as earnings season continues. Futures contracts tied to ... Read more »

Energy firm failures 'will cost all households £100', warns British Gas boss

The average household faces paying an extra £100 a year for energy to help foot the bill for 16 firms that have collapsed, the boss of the country’s biggest supplier ... Read more »

Budget speech – live: Sunak plans last-minute move to soften benefit cuts as he pledges recovery ‘optimism'

LIVE – Updated at 10:50 © HM Treasury / BEEM PRI206960150.jpg Rishi Sunak is reportedly planning to soften the blow of his cuts to Universal Credit by announcing changes to ... Read more »

Budget 2021 latest news: Universal Credit about-turn could be Rishi Sunak's 'rabbit out of the hat'

© Simon Walker HM Treasury Rishi Sunak, the Chancellor, and his junior Treasury minister Simon Clarke talk through the Budget – Simon Walker HM Treasury Markets blog live: Budget latest ... Read more »

ASK TONY: A long search for my late husband's old life assurance policies led to a £41,000 payment

© Provided by This Is Money MailOnline logo My husband of 64 years passed away in February 2020. He held three life policies which are now with ReAssure, but I’m ... Read more »

Sharp decline in the number of bankruptcies in Norway registered in the third quarter of 2021

A total of 660 bankruptcies were registered during the third quarter. That is a decrease of 17.5% compared with the same period last year. The decline amounted to 140 bankruptcies, ... Read more »

Santander beats forecasts following strong UK performance

© Provided by City AM Spanish bank Santander smashed profit expectations for the third quarter driven by robust lending activity in its mortgage unit. The lender pulled in more than ... Read more »

[Avertising Awards] Dunamu's campaign promotes sound digital asset market, investor protection

Upbit Investor Protection Center`s recent campaign featuring actor Namkoong Min. (Dunamu) We are honored to receive the 2021 Korea Herald Advertising Awards with our “Appropriate Digital Asset Investment Campaign” by ... Read more »

Politics news live: Universal Credit about-turn could be Rishi Sunak's Budget ‘rabbit out of the hat'

© Blower’s Cartoon Rishi Sunak will deliver his Budget from 12:30pm – Blower’s Cartoon How NHS Test & Trace frittered away £37bn Sunak starts building for life after Covid China ... Read more »

Capital Gains Tax could increase to align with Income Tax - 'big impact on landlords'

The wealth levy could be aligned with income tax, having already been frozen until 2026 in the last Budget. Many have suggested wealth taxes should be targeted as a fairer ... Read more »

Warning: Bills could go up by £200 because of collapsed energy firms

© Provided by Daily Mail Chris O’Shea told a House of Lords select committee yesterday that every household will have to pay at least £100 to cover the shortfall created ... Read more »

Student loan repayment threshold: How much the minimum salary for payments could be lowered in the 2021 Budget

Chancellor Rishi Sunak is reportedly considering lowering the earning threshold at which people start repaying their student loans. At present, people only have to make student loan payments if they ... Read more »

South Korea's housing market on verge of stabilization: fiscal chief

Finance Minister Hong Nam-ki speaks at a meeting of related ministers at the government complex in Seoul on Oct. 27 to monitor the local real estate market and discuss policies ... Read more »

How Do You Survive When Your Business Isn't Profitable at the Start?

If you’re planning a new business venture, you can’t expect to have a profitable business from the start. The earliest days in business are the hardest. In fact, one-quarter of ... Read more »

The Social World Meets Crypto Trading With Social Trading Apps

If there is one place where cryptocurrency discourse thrives, it is across social media. From predictions about the future prices of various tokens to the politics within the industry, crypto ... Read more »

‘You could lose your ENTIRE inheritance'! Online will writers cost families their fortunes

Legal experts are warning of a sharp rise in disputed legacies as more people prepare cheap online wills rather than paying to use a solicitor. Thousands of families could be ... Read more »

Shoppers warned of price surges in Christmas run-up as families at risk of energy debt

Shoppers have been warned to brace themselves for higher prices in the run-up to Christmas. It comes as a study shows the surge in energy prices risks leaving two in ... Read more »

British people want Rishi Sunak's Budget to fund social care and greener homes, research says

Several firms conducted research among their customer bases to discover what the nation’s priorities are ahead of the Government’s spending review and autumn Budget, both set to be unveiled in ... Read more »

Paying for boiler cover? Here's why you shouldn't bother

Boiler insurance is three times more expensive than the average cost of repairs, leaving those who pay for cover hundreds of pounds out of pocket each year.  © David J. ... Read more »

‘Work until you drop' - self-employed can NEVER retire as they have no pension savings

More than 1.3 million people will pay a high price for being their own bosses as their failure to build up their retirement savings could force them to carry on ... Read more »

Chancellor vows budget will deliver strong economy 'fit for a new age of optimism'

© Other The chancellor said he wants to see an economy of ‘higher wages, higher skills, and rising productivity’. Pics: HM Treasury/Flickr Rishi Sunak has claimed his budget will deliver ... Read more »

Ant Group may execute around 50% of Rs 10,000 crore OFS in Paytm IPO

Read more »

State pension rise slammed as insult to older generation - ‘50 years of work for what!?'

The Conservative manifesto pledged to protect the triple lock which protected pensions, ensuring payments would rise by either the rate of inflation of average earnings, the rate of inflation of ... Read more »

Autumn Statement: Budget to see £1 million in funding for Scotland's first e-car rally

Rishi Sunak’s budget is set to include £1 million in funding for Scotland to host its first e-car rally. © The Duke of Cambridge test drove one of the cars ... Read more »

Avendus PE Investment Advisors to launch Rs 1,000 crore structured credit fund

Avendus PE Investment Advisors, an asset management arm of Avendus Group, plans to launch a Rs 1,000 crore structured credit fund soon under alternative investment fund (AIF) Category II. ASCF–II ... Read more »

Poem ruling could give tax relief to several Indian multinationals

A collegium of income tax commissioners has ruled that even if the directors of a company are sitting in India and may decide specific action points, the situation doesn’t warrant ... Read more »

Ice-cream parlours facing a meltdown over 18% GST levy

Levy of 18% goods and services tax on ice-cream supplies with retro effect from July 2017 has led to a near meltdown for thousands of ice-cream parlours, most of which ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic