The Trade Desk Inc (TTD, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $41.45 billion, the stock is trading at $84.82. Over the past week, TTD's stock has seen a minor setback with a 1.29% loss. However, looking at a broader timeframe, the stock has gained an impressive 15.52% over the past three months. According to GF Value, The Trade Desk is currently modestly undervalued with a GF Value of $97.42, slightly down from the past GF Value of $97.57. This valuation has remained consistent, with the company being considered modestly undervalued both currently and three months ago.
Introduction to The Trade Desk Inc
The Trade Desk Inc operates within the software industry, providing a cutting-edge self-service platform for programmatic ad purchases. The platform spans various digital formats and devices, leveraging data analytics to optimize ad performance. As a demand-side platform in the digital advertising space, The Trade Desk's revenue is generated from the ad spend of its clients. This business model has positioned the company as a key player in the digital advertising ecosystem.
Assessing Profitability
TTD's financial health is robust, as indicated by its high Profitability Rank of 9 out of 10. The company's operating margin stands at 10.30%, outperforming 72.41% of its peers in the industry. Additionally, TTD's return on equity (ROE) is 8.56%, surpassing 62.84% of companies, while its return on assets (ROA) at 4.04% is better than 63.14% of companies. The return on invested capital (ROIC) is an impressive 14.15%, which is higher than 78.09% of companies. Notably, The Trade Desk has maintained profitability for the past 10 years, a feat better than 99.96% of companies, showcasing its consistent performance and financial stability.
Growth Trajectory of The Trade Desk
When it comes to growth, The Trade Desk does not disappoint, boasting a perfect Growth Rank of 10 out of 10. The company's 3-year revenue growth rate per share is an impressive 31.60%, which is better than 86.49% of companies. Its 5-year revenue growth rate per share is also strong at 30.80%, outperforming 90.59% of companies. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 19.30%, which is superior to 81.62% of companies. Despite a 3-year EPS without NRI growth rate of -9.70%, TTD's future 3 to 5-year EPS growth rate is projected at a robust 35.65%, indicating a positive outlook for earnings growth.
Notable Shareholders in The Trade Desk
TTD's shareholder base includes prominent investors such as Baillie Gifford (Trades, Portfolio), holding 40,984,017 shares, which translates to an 8.36% share percentage. Harbor Capital Appreciation Fund (Trades, Portfolio) owns 2,703,410 shares, accounting for 0.55% of the shares, while Catherine Wood (Trades, Portfolio) holds 2,057,760 shares, representing 0.42%. These significant investments by well-respected holders underscore confidence in The Trade Desk's business model and future prospects.
Competitive Landscape
In comparison to its competitors, The Trade Desk holds its own in the market. Datadog Inc (DDOG, Financial) has a market cap of $43.37 billion, Autodesk Inc (ADSK, Financial) is valued at $46.47 billion, and Ansys Inc (ANSS, Financial) stands at $28.66 billion. TTD's market cap of $41.45 billion positions it well within this competitive set, reflecting its strong market presence and investor confidence.
Conclusion
In summary, The Trade Desk Inc's recent stock performance has been a mix of short-term losses and medium-term gains, with the stock currently being modestly undervalued according to GF Value. The company's strong profitability and growth metrics, combined with the backing of significant investors, position it favorably in the competitive software industry. As TTD continues to innovate and capitalize on the growing digital advertising market, it remains a noteworthy stock for value investors to consider.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
