Why Trade Desk Inc (TTD) Shares Are Soaring


Investors are likely most pleased with Trade Desk Inc (NASDAQ:TTD) first-quarter earnings, where both revenue and Adjusted EBITDA results were materially ahead of expectations, while full-year guidance was raised. In reaction, TTD shares are up over 20% to $48.20 in pre-market trading Friday.

Revenue of $53.4 million handily exceeded Street estimates of $43 million with the company highlighting Mobile, new clients and International as key growth areas. Adj. EBITDA of $6.3 million was also ahead of Street estimates of 1.0 million. For Q2, TTD guided to revenue of $67 million, ahead of the Street’s $61 million expectation and 14.5 million in Adj. EBITDA, ahead of the Street’s $13.4 million. For full-year 2017, the digital ad firm raised their revenue guidance to “at least” $291 million (from $270 million) and Adj. EBITDA of $78 million (from $72 million).

To reflect a much stronger-than-expected earnings performance, Cantor analyst Kip Paulson upgrades TTD to Overweight from Neutral and raises his price target to $55 from $40.

Paulson commented, “Trade Desk revenue re-accelerated to +76% Y/Y (from +69.7% in 4Q16) on strong customer wins, international growth, and mobile channel growth, despite a seasonally light 1Q that has historically been difficult to predict, and this visibility/momentum could continue through 2017. The Trade Desk stands out, we believe, as a highly differentiated, independent and objective buy-side focused DSP that benefits from 1) broad omni-channel capabilities, 2) a highly expressive platform, 3) a sticky MSA business model with very loyal customers (95%+ retention), and 4) secular tailwinds from a large and growing programmatic advertising market, in which it continues to gain share.”

In addition, RBC analyst Mark Mahaney maintained a Buy rating on TTD today, with a price target of $56, while Jefferies’ Brian Fitzgerald reiterated a Buy rating on the stock and has a price target of $57.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Mahaney and Brian Fitzgerald have a yearly average return of 18.0% and 20.9% respectively. Mahaney has a success rate of 71% and is ranked #25 out of 4560 analysts, while Fitzgerald has a success rate of 79% and is ranked #17.

Sentiment on the street is mostly bullish on TTD stock. Out of 7 analysts who cover the stock, 5 suggest a Buy rating and 2 recommend to Hold the stock. The 12-month average price target assigned to the stock is $48.57, which represents a potential upside of 22% from where the stock is currently trading.

The Trade Desk, Inc. provides a technology platform for ad buyers. It offers agencies, aggregators and advertisers technology to manage and display, social, mobile and video advertising campaigns. 

 

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts