Trade Desk Touts A 'Long Growth Runway,' Expect Market Share Gains: Analyst

Zinger Key Points
  • Morgan Stanley expects Trade Desk to be 'evenly split' between CTV and other channels by 2026.
  • Trade Desk's 2021 gross billings were more than $6B, 'just 9% of the $65B advertising opportunity.'

Trade Desk Inc. TTD, a demand-side platform (DSP) and leader in connected television (CTV), is expected to grow its market share while maintaining EBITDA margins of around 40% going ahead, according to Morgan Stanley MS.

The Trade Desk Analyst: Matthew Cost initiated coverage of the Ventura, California-based company with an Equal-Weight rating and a price target of $60.

The Trade Desk Thesis: Trade Desk has a long growth runway, given that its 2021 gross billings were around $6.1 billion, which represents only 9% of the $65 billion advertising opportunity, Cost said in the initiation note.

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“We see TTD's independent platform and leading technology extending its share in open web advertising, as we expect it to grow overall gross billings at a 28% '21-'24 CAGR and to grow CTV (including video) billings at a ~36% '21-'24 CAGR,” the analyst wrote.

“Our analysis of TTD's growth and market share by channel showcases its diversification, as we expect the business to be evenly split between CTV and other channels by '26 (vs. ~40% CTV today), despite TTD significantly increasing its CTV share over the same period,” he added.

TTD Price Action: Shares of Trade Desk had risen by 4.62% to $57.14 at the time of writing on Tuesday, Oct. 18.

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Posted In: Analyst ColorInitiationAnalyst RatingsMatthew CostMorgan Stanley
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