Trade Desk Pops 27% On Record Quarterly Sales; Analyst Lifts PT

Shares of Trade Desk jumped 26.6% on Friday after the cloud-based advertising technology platform provider reported stronger-than-expected 3Q results and issued upbeat revenue guidance for 4Q.

Trade Desk’s (TTD) 3Q adjusted earnings of $1.27 per share jumped 69.3% year-over-year and crushed analysts’ expectations of $0.42. Revenues soared 32% to $216.1 million and also came ahead of consensus estimates of $180.2 million.

Trade Desk CEO Jeff Green said, “So far in 2020 we’ve seen several years of advertising disruption and innovation compressed into a few months. As a result, advertisers have become more deliberate and data-driven with every advertising dollar. That helped us deliver record quarterly revenue of $216 million and adjusted EBITDA of $77 million.” (See TTD stock analysis on TipRanks).

Trade Desk forecasts revenues of $287-$291 million for 4Q, which is above the Wall Street projection of $252.6 million. Moreover, it expects adjusted EBITDA of at least $115 million in 4Q.

Following the earnings release, Wells Fargo analyst Brian Fitzgerald raised the stock’s price target to $750 (8.5% downside potential) from $550 and reiterated a Buy rating. In a Nov. 6 note to investors, Fitzgerald said that his rating and raised price target is based on “increasing near-term conviction and TTD’s open ended opportunity to facilitate a meaningful share of digital TV ad budgets long-term.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 4 Buys and 7 Holds. With shares up over 215% year-to-date, the average price target of $677.22 now implies downside potential of about 17.4% to current levels.

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