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TTD STOCK WRITE UP


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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