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Trade Desk (TTD)
NASDAQ:TTD
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Trade Desk
(NASDAQ:TTD)63Neutral
Positive Factors
Competitive Positioning
TTD's competitive positioning in high growth areas like CTV and retail media, along with growth in Audio, supports the company’s premium multiple.
Strategic Partnerships
TTD's partnership with WMT is a proof point for the potential of retail media/data unlocking, indicating future growth opportunities.
Negative Factors
Competitive Environment
The emergence of Amazon as a lower cost competitor in the DSP marketplace raises questions about TTD's competitive landscape.
Execution Challenges
TTD reported substantially worse-than-expected 4Q results & 1Q guidance, citing execution challenges.
Revenue Growth Concerns
Consensus revenue growth for 2025 is expected to be below initial estimates due to potential macroeconomic challenges.
Trade Desk (TTD) vs. S&P 500 (SPY)
Market Cap
$32.20B
Dividend YieldN/A
Average Volume (3M)10.26M
Price to Earnings (P/E)83.2
Beta (1Y)1.84
Revenue Growth25.63%
EPS Growth118.49%
CountryUS
Employees3,115
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)0.78
Shares Outstanding452,425,870
10 Day Avg. Volume10,886,130
30 Day Avg. Volume10,258,340
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)N/A
Price to Sales (P/S)13.17
Price to Cash Flow (P/CF)40.40
P/FCF Ratio36.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$121.28Price Target Upside86.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering27
Trade Desk Business Overview & Revenue Model
Company DescriptionThe Trade Desk, Inc. operates as a technology company in the digital advertising industry, providing a robust platform that enables ad buyers to create, manage, and optimize digital advertising campaigns across various channels, including display, video, audio, and social media. The company's platform leverages a data-driven approach to help advertisers reach their target audiences more effectively and efficiently, utilizing advanced machine learning and artificial intelligence tools.
How the Company Makes MoneyThe Trade Desk generates revenue primarily through its demand-side platform (DSP), which allows advertisers, agencies, and other buyers to purchase and manage digital advertising inventory in real-time. The company's revenue model is predominantly based on a percentage of the advertising spend that flows through its platform, known as a take rate. Additionally, The Trade Desk may earn fees from data and analytics services that enhance ad targeting and performance tracking. Key partnerships with major media companies and data providers also contribute to its revenue, enabling access to premium ad inventory and valuable audience insights.
Trade Desk Financial Statement Overview
Summary
Trade Desk exhibits exceptional financial health with strong revenue and profit growth, efficient capital structure, and impressive cash flow generation. The company is well-positioned in the Software industry, demonstrating robust operational performance and financial stability, which augurs well for future growth and shareholder value creation.Income Statement
Trade Desk has demonstrated robust revenue growth with a 25.62% increase year-over-year from 2023 to 2024, accompanied by a strong gross profit margin of 80.69% in 2024. The net profit margin improved significantly to 16.08%, reflecting enhanced operational efficiency. The EBIT and EBITDA margins stand at a healthy 17.47%, indicating strong core profitability. These metrics showcase solid growth and profitability, despite intense industry competition.85
Very Positive
Balance Sheet
The company maintains a sound financial position with a low debt-to-equity ratio of 0.11, indicating conservative leverage. The return on equity (ROE) improved to 13.33%, highlighting effective utilization of equity to generate profit. The equity ratio is 48.24%, suggesting a balanced capital structure. Overall, Trade Desk's balance sheet reflects stability and low financial risk.78
Positive
Cash Flow
Trade Desk achieved a notable 18.01% growth in free cash flow from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.88, showcasing efficient conversion of income into cash. Additionally, the free cash flow to net income ratio of 1.63 underscores robust cash flow relative to earnings. These metrics reflect excellent liquidity and cash management.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.44B | 1.95B | 1.58B | 1.20B | 836.03M | Gross Profit |
| 1.97B | 1.58B | 1.30B | 974.91M | 657.22M | EBIT |
| 427.17M | 200.48M | 113.65M | 124.82M | 144.21M | EBITDA |
| 514.66M | 280.90M | 168.08M | 124.82M | 144.21M | Net Income Common Stockholders |
| 393.08M | 178.94M | 53.38M | 137.76M | 242.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.92B | 1.38B | 1.45B | 958.78M | 624.04M | Total Assets |
| 6.11B | 4.89B | 4.38B | 3.58B | 2.75B | Total Debt |
| 312.21M | 235.89M | 260.96M | 284.60M | 292.43M | Net Debt |
| -1.06B | -659.24M | -769.55M | -469.56M | -144.92M | Total Liabilities |
| 3.16B | 2.72B | 2.27B | 2.05B | 1.74B | Stockholders Equity |
| 2.95B | 2.16B | 2.12B | 1.53B | 1.01B |
| Cash Flow | Free Cash Flow | |||
| 641.22M | 543.30M | 456.85M | 318.54M | 324.95M | Operating Cash Flow |
| 739.46M | 598.32M | 548.73M | 378.51M | 405.07M | Investing Cash Flow |
| -157.51M | -107.59M | -304.37M | -93.64M | -143.27M | Financing Cash Flow |
| -107.61M | -626.11M | 31.99M | 31.93M | 44.68M |
Trade Desk Technical Analysis
Negative
64.91
Price Trends
104.88
Negative
115.34
Negative
107.51
Negative
Market Momentum
-12.69
Positive
18.78
Positive
10.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTD, the sentiment is Negative. The current price of 64.91 is below the 20-day moving average (MA) of 82.18, below the 50-day MA of 104.88, and below the 200-day MA of 107.51, indicating a bearish trend. The MACD of -12.69 indicates Positive momentum. The RSI at 18.78 is Positive, neither overbought nor oversold. The STOCH value of 10.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TTD.
Trade Desk Risk Analysis
Trade Desk disclosed 49 risk factors in its most recent earnings report. Trade Desk reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Trade Desk Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $106.84B | 87.08 | 28.91% | ― | 18.36% | ― | |
73 Outperform | $11.19B | ― | -5.37% | ― | 18.03% | 82.15% | |
68 Neutral | $1.87B | 94.41 | 3.10% | ― | 7.82% | ― | |
67 Neutral | $474.11M | 42.11 | 4.36% | ― | 9.08% | 43.58% | |
63 Neutral | $32.20B | 83.16 | 15.37% | ― | 25.63% | 118.49% | |
62 Neutral | $36.06B | ― | -51.45% | ― | 1.00% | -148.89% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
TTD
Trade Desk
64.91
-16.54
-20.31%
TTWO
Take-Two
204.33
58.46
40.08%
MGNI
Magnite
13.10
1.75
15.42%
ROKU
Roku
76.67
12.26
19.03%
SPOT
Spotify Technology SA
532.10
277.65
109.12%
PUBM
PubMatic
9.77
-10.60
-52.04%
Trade Desk Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -46.90% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of significant achievements and challenges. The Trade Desk reported record revenue growth and strategic advancements in CTV and international markets. However, it also faced a historical shortfall in meeting financial expectations due to execution missteps and increased expenses, creating a balanced outlook with both positive and negative elements.Highlights
Record-Breaking Year for The Trade Desk
Total spend on the platform exceeded $12 billion, with revenue surpassing $2.4 billion, marking a 26% year-over-year growth. Adjusted EBITDA was over $1 billion, and free cash flow exceeded $600 million.
Strong CTV Growth
CTV advertising saw outsized growth and remains a small fraction of total TV ad spend relative to linear, indicating significant future potential.
Expansion of Joint Business Plans
Joint Business Plans with brands and agencies grew 50% faster than the rest of the business, showcasing the company's strategic partnerships.
International Growth
International growth outpaced North America for the eighth consecutive quarter, with CTV growth particularly strong across international regions.
AI and Kokai Enhancements
Increased focus on AI investments and transitioning clients from Solimar to Kokai, promising enhanced performance and capabilities.
Lowlights
Missed Financial Expectations
For the first time in 33 quarters, the company fell short of its own expectations, marking a significant moment for The Trade Desk.
Execution Missteps
A series of small execution missteps, such as slower Kokai rollout and internal structural changes, contributed to the shortfall.
Q4 Revenue Shortfall
Q4 revenue was $741 million, a 22% year-over-year increase, but below internal expectations, marking a deviation from historical performance.
Increased Operating Expenses
Q4 operating expenses, excluding stock-based compensation, increased by 23% from the previous year, impacting margins.
Company Guidance
During The Trade Desk's Q4 2024 earnings call, the company reported record achievements for the year, with total platform spend exceeding $12 billion and revenue surpassing $2.4 billion, reflecting a 26% year-over-year growth. Despite generating over $1 billion in adjusted EBITDA and more than $600 million in free cash flow, the company acknowledged missing its guidance for the first time in 33 quarters due to execution missteps. In response, The Trade Desk implemented significant organizational changes, including a major reorganization and refocusing on internal effectiveness, to better align with the growing market opportunities. For Q1 2025, they anticipate revenue of at least $575 million, representing a 17% year-over-year increase, and expect adjusted EBITDA to be around $145 million. The company remains optimistic about continued strong growth, with strategic investments planned to capitalize on the expanding digital advertising landscape.Trade Desk Corporate Events
Executive/Board ChangesStock BuybackFinancial Disclosures
Trade Desk Appoints New Director, Expands Board
Positive
Feb 12, 2025
On February 14, 2025, The Trade Desk’s Board of Directors appointed Alexander Kayyal as a Class I director, expanding the Board to eight members. Kayyal will participate in the company’s non-employee director compensation program, including equity grants and indemnification agreements. Additionally, the company announced a significant share repurchase program authorized in January 2025, increasing the total potential repurchases to $1 billion. The company’s financial performance in 2024 showed significant growth with a 26% revenue increase year over year, reaching $2.4 billion, despite disappointing results in the fourth quarter. The Trade Desk also continues to innovate and expand its offerings, including acquiring Sincera and supporting industry initiatives like Unified ID 2.0, positioning itself as a leader in the digital advertising space.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.