What Are the Fundamentals Of TTD?

The Trade Desk logged a -0.7% change during today's afternoon session, and is now trading at a price of $84.77 per share.

The Trade Desk returned gains of 35.0% last year, with its stock price reaching a high of $91.85 and a low of $39.43. Over the same period, the stock outperformed the S&P 500 index by 18.0%. More recently, the company's 50-day average price was $81.53. The Trade Desk, Inc. operates as a technology company in the United States and internationally. Based in Ventura, CA, the large-cap Technology company has 2,770 full time employees. The Trade Desk has not offered a dividend during the last year.

The Company Has a Positive Net Current Asset Value:

2018-02-28 2019-02-22 2020-02-28 2021-02-19 2022-02-16 2023-02-15
Revenue (MM) $308 $477 $661 $836 $1,196 $1,578
Gross Margins 79.0% 76.0% 76.0% 79.0% 81.0% 82.0%
Operating Margins 23% 22% 17% 17% 10% 7%
Net Margins 16.0% 18.0% 16.0% 28.0% 12.0% 3.0%
Net Income (MM) $51 $88 $108 $242 $138 $53
Net Interest Expense (MM) -$2 $0 $5 $1 -$1 $13
Depreciation & Amort. (MM) -$7 -$12 -$22 -$29 -$42 -$54
Earnings Per Share $0.12 $0.19 $0.23 $0.49 $0.28 $0.11
EPS Growth n/a 58.33% 21.05% 113.04% -42.86% -60.71%
Diluted Shares (MM) 441 458 478 490 499 500
Free Cash Flow (MM) $44 $112 $96 $479 $433 $633
Capital Expenditures (MM) -$13 -$25 -$36 -$74 -$55 -$84
Net Current Assets (MM) $214 n/a n/a n/a n/a n/a

The Trade Desk has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio. We also note that the company benefits from wider gross margins than its peer group and a strong EPS growth trend. However, the firm has weak operating margins with a negative growth trend.

The Trade Desk Has Elevated P/B and P/E Ratios:

The Trade Desk has a trailing twelve month P/E ratio of 313.6, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $1.49, the company has a forward P/E ratio of 54.7. The Trade Desk's PEG ratio is 33.42 on the basis of the 9.4% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, The Trade Desk is likely overvalued compared to the book value of its equity, since its P/B ratio of 20.05 is higher than the sector average of 6.23. The company's shares are currently trading 2516.4% above their Graham number.

The Trade Desk Has an Analyst Consensus of Some Upside Potential:

The 25 analysts following The Trade Desk have set target prices ranging from $28.0 to $105.0 per share, for an average of $85.9 with a buy rating. As of April 2023, the company is trading -5.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.

The Trade Desk has an average amount of shares sold short because 3.1% of the company's shares are sold short. Institutions own 78.1% of the company's shares, and the insider ownership rate stands at 1.14%, suggesting a large amount of insider shareholders. The largest shareholder is Baillie Gifford and Company, whose 10% stake in the company is worth $3,856,282,937.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.