Trade Desk (TTD) AI Stock Analysis

• Market Cap: $36.31B
• Dividend Yield: N/A
• Average Volume (3M): 10.90M
• Price to Earnings (P/E): 90.4
• Beta (1Y): 1.77
• Revenue Growth: 25.07%
• EPS Growth: 103.30%
• Country: US
• Employees: 3,522
• Sector: Technology
• Sector Strength: 76
• Industry: Software - Application
• EPS (TTM): 0.33
• Shares Outstanding: 448,136,000
• 10 Day Avg. Volume: 10,034,748
• 30 Day Avg. Volume: 10,903,439
• PEG Ratio: 2.56
• Price to Book (P/B): 9.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 43.21
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $87.88
• Price Target Upside: 18.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29

• Rating: 73 Outperform
• Price Target: $87.00 ▲( 17.74% Upside)

Trade Desk's overall score reflects its strong financial performance and positive earnings call, highlighting consistent growth and strategic initiatives. However, the high P/E ratio raises valuation concerns, and technical indicators suggest the stock may be overbought. The appointment of a new COO supports future growth, adding a positive note to the outlook. Investors should balance the promising growth prospects with valuation risks.

Positive Factors

Management Strategy

The focus on hiring more senior talent is expected to drive operating leverage and improve team performance at Trade Desk.

New Revenue Streams

The creation of a GenAI-based creative marketplace by Trade Desk is expected to provide a new source of revenue by sharing in the revenue from GenAI-based apps.

Negative Factors

Advertising Spend

The weakening ad backdrop is starting to put pressure on both auto and CPG spend.

Market Competition

The narrative overhang around megacap competition could limit shares in the near-term.

Trade Desk Business Overview & Revenue Model

Company Description

Trade Desk, Inc. operates as a technology company in the United States and internationally. The company operates a self-service cloud-based platform that allows buyers to create, manage, and optimize data-driven digital advertising campaigns across various ad formats and channels, including display, video, audio, native, and social on various devices, such as computers, mobile devices, and connected TV. It also provides data and other value-added services. The company serves advertising agencies and other service providers for advertisers. The Trade Desk, Inc. was incorporated in 2009 and is headquartered in Ventura, California.

How the Company Makes Money

The Trade Desk generates revenue primarily through its demand-side platform (DSP), which allows advertisers, agencies, and other buyers to purchase and manage digital advertising inventory in real-time. The company's revenue model is predominantly based on a percentage of the advertising spend that flows through its platform, known as a take rate. Additionally, The Trade Desk may earn fees from data and analytics services that enhance ad targeting and performance tracking. Key partnerships with major media companies and data providers also contribute to its revenue, enabling access to premium ad inventory and valuable audience insights.

Trade Desk Financial Statement Overview

Summary

Trade Desk exhibits exceptional financial health with strong revenue and profit growth, efficient capital structure, and impressive cash flow generation. The company is well-positioned in the Software industry, demonstrating robust operational performance and financial stability, which augurs well for future growth and shareholder value creation.

Income Statement

Trade Desk has demonstrated robust revenue growth with a 25.62% increase year-over-year from 2023 to 2024, accompanied by a strong gross profit margin of 80.69% in 2024. The net profit margin improved significantly to 16.08%, reflecting enhanced operational efficiency. The EBIT and EBITDA margins stand at a healthy 17.47%, indicating strong core profitability. These metrics showcase solid growth and profitability, despite intense industry competition.

Balance Sheet

The company maintains a sound financial position with a low debt-to-equity ratio of 0.11, indicating conservative leverage. The return on equity (ROE) improved to 13.33%, highlighting effective utilization of equity to generate profit. The equity ratio is 48.24%, suggesting a balanced capital structure. Overall, Trade Desk's balance sheet reflects stability and low financial risk.

Cash Flow

Trade Desk achieved a notable 18.01% growth in free cash flow from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.88, showcasing efficient conversion of income into cash. Additionally, the free cash flow to net income ratio of 1.63 underscores robust cash flow relative to earnings. These metrics reflect excellent liquidity and cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.44B	1.95B	1.58B	1.20B	836.03M
	Gross Profit
1.97B	1.58B	1.30B	974.91M	657.22M
	EBIT
427.17M	200.48M	113.65M	124.82M	144.21M
	EBITDA
514.66M	280.90M	168.08M	124.82M	144.21M
	Net Income Common Stockholders
393.08M	178.94M	53.38M	137.76M	242.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.92B	1.38B	1.45B	958.78M	624.04M
	Total Assets
6.11B	4.89B	4.38B	3.58B	2.75B
	Total Debt
312.21M	235.89M	260.96M	284.60M	292.43M
	Net Debt
-1.06B	-659.24M	-769.55M	-469.56M	-144.92M
	Total Liabilities
3.16B	2.72B	2.27B	2.05B	1.74B
	Stockholders Equity
2.95B	2.16B	2.12B	1.53B	1.01B
Cash Flow		Free Cash Flow
641.22M	543.30M	456.85M	318.54M	324.95M
	Operating Cash Flow
739.46M	598.32M	548.73M	378.51M	405.07M
	Investing Cash Flow
-157.51M	-107.59M	-304.37M	-93.64M	-143.27M
	Financing Cash Flow
-107.61M	-626.11M	31.99M	31.93M	44.68M

Trade Desk Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 73.89
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTD, the sentiment is Neutral. The current price of 73.89 is above the 20-day moving average (MA) of 66.75, above the 50-day MA of 58.36, and below the 200-day MA of 97.52, indicating a neutral trend. The MACD of 5.48 indicates Negative momentum. The RSI at 64.77 is Neutral, neither overbought nor oversold. The STOCH value of 26.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TTD.

Trade Desk Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GTM	74 Outperform	$3.12B	77.26	2.23%	―	-3.12%	-37.59%
TTD	73 Outperform	$36.31B	90.36	16.88%	―	25.07%	103.30%
GRND	73 Outperform	$4.70B	―	-63.52%	―	30.08%	-196.62%
PUBM	70 Outperform	$547.94M	133.14	1.94%	―	3.62%	-53.21%
DSP	69 Neutral	$843.40M	447.84	4.15%	―	30.64%	―
DV	69 Neutral	$2.13B	44.27	4.83%	―	15.30%	-22.69%
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%

Trade Desk Corporate Events

Trade Desk Announces Board Changes with Wells’ Departure

On April 3, 2025, David Wells announced he would not seek re-election to The Trade Desk‘s board of directors at the 2025 annual meeting, ending his service since December 2015. The board plans to appoint Kathryn E. Falberg as chairperson of the audit committee, and upon Wells’s departure, the board will reduce its size from eight to seven directors.

The Trade Desk Appoints Vivek Kundra as COO

On March 12, 2025, The Trade Desk announced the appointment of Vivek Kundra as Chief Operating Officer, effective March 31, 2025. Kundra, who brings extensive experience from roles at project44, Sprinklr, and Salesforce, will oversee global operations to drive operational excellence. His appointment aligns with The Trade Desk’s growth objectives, as the company continues to expand its reach in the digital advertising industry. Kundra’s leadership is expected to enhance operational rigor and accelerate the company’s growth, leveraging his expertise in cloud computing and strategic industry expansions.