KeyBanc Capital Markets, on Monday, adjusted its outlook for The Trade Desk (NASDAQ: NASDAQ:TTD), a provider of technology for managing digital advertising campaigns, with the firm increasing the stock's price target to $105 from the previous $100, while maintaining an Overweight rating on the shares.
The adjustment comes amid concerns in the industry regarding brand advertising, especially following recent results from YouTube. KeyBanc's analyst pointed out several factors that support a positive view of The Trade Desk's prospects.
Notably, the analyst believes that Amazon (NASDAQ:AMZN)'s market activities have not significantly impacted The Trade Desk's performance. Additionally, The Trade Desk is not facing difficult year-over-year comparisons in China, which is beneficial given that September and October are expected to present easier comparisons.
Moreover, the analyst anticipates that the introduction of The Trade Desk's new product, Kokai, along with a softer upfront market, could lead to market share gains for the company. These elements are expected to contribute to The Trade Desk's ability to surpass expectations.
KeyBanc's analysis suggests that The Trade Desk is on track to sustain over 20% annual growth over the medium term. This optimistic growth projection is reflected in the raised price target, which is based on a 41.5 times multiple of the company's estimated 2025 enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization).
Meanwhile, analysts from Stifel reaffirmed a Buy rating on the company's stock, citing the significant shift of advertising budgets from linear platforms to Connected TV (CTV) as a potential growth driver. BTIG raised its price target for The Trade Desk to $110, anticipating improvements in digital advertising throughout the year.
Truist Securities also maintained a bullish stance on The Trade Desk, expecting the company's second-quarter earnings to surpass management's guidance. Wells Fargo kept its Overweight rating, highlighting the company's upcoming integration with Netflix (NASDAQ:NFLX) as a positive development. Loop Capital increased its price target to $109 following strong quarterly earnings reported by The Trade Desk.
InvestingPro Insights
With The Trade Desk's (NASDAQ:TTD) recent performance and future prospects in focus, real-time data from InvestingPro provides additional context for investors considering the company's shares. The Trade Desk boasts a robust gross profit margin of 81.29% for the last twelve months as of Q1 2024, demonstrating the company's efficiency in managing its cost of goods sold relative to its revenue. This impressive margin underlines The Trade Desk's strong position within the digital advertising space, aligning with KeyBanc's positive outlook on the company's ability to surpass expectations.
Despite a recent dip in share price, with a 1-week total return of -7.97%, the company's longer-term trajectory shows a significant 6-month total return of 29.25%, indicating a resilient upward trend over a more extended period. This aligns with the InvestingPro Tip highlighting the stock's large price uptick over the last six months, which may interest investors looking for growth potential in their portfolios.
InvestingPro Tips also suggest that The Trade Desk is expected to be profitable this year, supporting KeyBanc's optimistic view on the company's growth and market share gains. Furthermore, for those seeking a more comprehensive analysis, InvestingPro offers additional insights, with a total of 17 InvestingPro Tips available for The Trade Desk at https://www.investing.com/pro/TTD. Investors can utilize the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to a wealth of data and expert analysis to inform their investment decisions.
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