TTD Analyst Remains Bullish Citing Stronger Relative Revenue & FCF Growth Estimates

  • Needham analyst Laura Martin reiterated a Buy on The Trade Desk, Inc TTD and a $65 price target.
  • Yesterday, TTD laid out its strong competitive position, accelerating growth drivers, and rising barriers to entry in a 4-hour presentation to a packed room in NYC. 
  • TTD reiterated its long-term 40% EBITDA goal but did not add new 2022 or 2023 financial targets. 
  • Their primary focus was Open Internet ad growth drivers and TTD's strategic position within that context.
  • Despite its material valuation premium, the analyst reiterated the Buy rating on TTD owing to its much more substantial relative revenue and FCF growth estimates for 2H22.
  • She believes that the most significant mobile Walled Gardens like Meta Platforms Inc METASnap Inc SNAPAlphabet Inc GOOG GOOGL YouTube are losing their share of the Open Internet, driven by the shift from mobile toward Connected TVs. This shift from mobile to CTV ads accelerated during COVID lockdowns and due to Apple Inc's AAPL iOS privacy changes.
  • The analyst estimates TTD as the largest demand-side platform in the "Open Internet," with $10 billion of total ad spending crossing its platform in 2023. This will represent about 20% of the $50 billion Open Internet ad spending in 2023.
  • TTD's new data marketplace in its Solimar upgrade helps ad agencies determine how to best spend ad dollars for the highest ROAS.
  • TTD is data-driven, and as ad budgets rebound post-recession in the EU and potentially the U.S., advertising ROAS will become more sharply in focus. Any ad campaign executed on TTD's platform can quickly calculate the ROAS of every ad buy on every media channel in real time.
  • Price Action: TTD shares traded lower by 3.47% at $61.45 on the last check Wednesday.
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