TTD (THE TRADE DESK)
- P/E: 54.58
- GAAP DILUTED Y-O-Y EPS GROWTH LAST QUARTER: $.11
- SECTOR: COMMERCIAL SERVICES
- ASSETS-LIABILITIES: 1.44
- DIVIDEND: none
The Trade Desk, or TTD, is
an online advertising company. TTD also hosts an online advertising
marketplace. The industry for this company is rapidly expanding, and
it currently has the highest percentage of market share by a large
margin.
In the most recent quarter,
TTD increased revenue 70% year-over-year. Operating expenses also
grew across the board, as the company nearly doubled its spending on
sales, marketing, technology and development (the company does not
track R&D), general/administrative costs, and “platform
operations,” bringing the gross margin down slightly. Prior to the
implementation of GAAP, TTD posted a $.05 gain in EPS, and $.11
afterward. The company reduced its debt, and doubled its assets from
the last comparable quarter. Most of the increase in assets is
located in the company's enormous cash pile.
Jeff Green, who founded the
company in 2009, also serves as its CEO. Previously, he founded
AdECN, which the company boasts as the world's first online
advertising exchange. The company specializes in marketing on
digitally broadcast TV shows and other videos, digital audio such as
Spotify, social media and other digital platform advertising, and
hosting a marketplace where advertisers can bid on advertising space
in real-time based on metrics which the company also provides.
Similartech rates TTD as the largest provider of online advertising.
Although the company already has the bulk of the market share in its
burgeoning space, its revenue has been growing exponentially due to
the expansion of the online advertising space. As online media
becomes more popular, so do the advertising services catering to
these markets.
Despite its cash pile, the
company recently completed a second offering to raise funds in March
2017. For the upcoming quarter, TTD has given a guidance of $43
million revenue, slightly below Wall Street's expectation of $43.42
million. Wall Street is expecting $.01 EPS, an improvement over the
loss in the comparable Q1 '16, but still down from Q1 '15. On its
press release, the company announces its goal as aggressive investing
rather than extracting profits, and an analysis of revenue growth
reveals that revenue on a quarterly basis has doubled from the Q1 '15
quarter.
TTD has committed itself to
aggressive investment within a burgeoning industry, focusing on
revenue rather than profits. Its stock trades at a high
price-to-earnings multiple because of the high expectations for
revenue growth. In the past, the company has shown rapid revenue
growth. With the company reporting on 5/11/17, Wall Street will be
looking for the company to deliver on its promise of revenue growth
to propel the stock further upward.
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