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The Trade Desk is Soaring After Beating the Street

Stock (Symbol)

Trade Desk (TTD)

Stock Price

$52

Sector
Technology
Data is as of
May 15, 2017
Expected to Report
Aug 11
Company Description
The Trade Desk, Inc. is a technology company. The Company provides a self-service platform that enables clients to purchase and manage digital advertising campaigns across various advertising formats, including display, video and social, and on a range of devices, including computers, mobile devices and connected television. Source: Thomson Financial
Sharek’s Take
David SharekThe Trade Desk (TTD) stock is flying higher after the company reported a surprise profit last qtr. TTD shot from $40 to $52 on Friday, and is up to $54 today (Monday). The surge is on high volume — an indications institutions are loading up on the stock. What spurred the move is TTD reported a profit of $0.18 last qtr. Analysts had expected break-even ($0.00). This is the 2nd big beat by the company since it went public last fall. The Trade Desk is a cloud-based software platform which allows sophisticated advertising executives to manage digital ad campaigns across different spectrums, such as TV or the Internet. Recent new clients include Proctor & Gamble, one of the world’s largest banks, and a couple car manufacturers. The company has delivered a client retention rate of 95% for 13 straight qtrs. The strong push higher for this stock is a very bullish sign. I feel I need to take a position in TTD as this could be the beginning of a multi-year move higher as the stock boasts a nice Est. LTG of 32% per year. Analysts expect profits will climb from around $1 this year to $2 two years from now. I will add The Trade Desk to the Growth Portfolio today, but will just take a small position as the stock has little trading history.
One Year Chart
TTD’s numbers are hard to get at this point, as this is a recent IPO. Some figures from the year-ago periods I don’t have. Also, Thomson is giving me different numbers than the company is. Last qtr the company delivered 100% profit growth on a 76% gain in sales. Management then upped revenue guidance for the 2nd straight qtr. I like the Est. LTG of 32% per year and feel the company can grow much faster than that. The P/E of 48 high but I feel the P/E could go higher as fast-growing software stocks can get P/Es of 60 or more. Nice one-year chart, stock is breaking out here.
Fair Value
Profits are expected to climb from $0.89 last year to $1.08 this year. I think they will grow much faster as the company is growing sales at 75% right now. My Fair Value is 60x earnings which is a $65 Fair Value for this year, but I honestly don’t have a firm grasp on where the stock is headed. 
Bottom Line
The Trade Desk is a hot stock right now, and just jumped on the highest volume its had since the company had its IPO last September. This could be the beginning of a long multi-year run higher for the stock, but then again there’s not much history here so TTD could drop later on if it produces a poor outlook. I will add TTD to the Growth Portfolio today but will hold off adding it to the Aggressive Growth Portfolio due to the stock’s short trading history. I won’t make this a big holding, but with the stock soaring I do want to get invested just in case it goes on to be a big winner.
Power Rankings
Growth Stock Portfolio

21 of 29

Aggressive Growth Portfolio

N/A

Conservative Stock Portfolio

N/A