TTD - The Trade Desk: A Compelling Investment For Aggressive Growth Seekers

2024-06-21 03:26:22 ET

Summary

• The Trade Desk is one of the few cloud stocks performing well in 2024, benefiting from TV viewers shifting to streaming, ad dollars following, and industry adoption of UID 2.0.
• The ad industry's move towards open platforms is a significant tailwind for the company.
• It reported strong first quarter 2024 earnings, beating revenue and EPS estimates, with the stock up 42.81% since my last article published.

The Trade Desk (TTD) , a company providing the ad industry with a cloud-based platform that assists marketers in digital advertising purchases using automated real-time ad impression bidding, is one of the few cloud stocks performing well in 2024. There are several secular tailwinds responsible for this advertising platform's outperformance, including TV viewers continuing to adopt streaming, ad dollars following those viewers to streaming platforms, the industry's growing adoption of the privacy identifier UID 2.0, and the ad industry slowly moving away from closed advertising markets like Alphabet's ( GOOGL )( GOOG ) Google and Meta Platforms' ( META ) Facebook.

Since I last wrote about the company on January 4, 2024, by giving the stock a strong buy recommendation to start the new year, the company has reported fourth quarter 2023 and first quarter 2024 earnings results. Although it missed analysts' revenue and earnings-per-share ("EPS") estimates in the fourth quarter, the company reported solid numbers in the first quarter, beating analysts' revenue estimates by 2.2% and EPS estimates by 20.74%. Also, management's revenue guidance for the second quarter of 2024 of $575 million exceeded analyst estimates of $567.1 million. The stock is up 43.26% since Seeking Alpha published my last article, compared to the S&P 500 Index, which was up 17.09% over the same period. The following chart shows the year-to-date results until the June 19 market close. ...

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