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The Trade Desk, Inc. (NASDAQ:TTD) Analysts Are Pretty Bullish On The Stock After Recent Results

·3 min read

The investors in The Trade Desk, Inc.'s (NASDAQ:TTD) will be rubbing their hands together with glee today, after the share price leapt 48% to US$74.24 in the week following its second-quarter results. Revenues of US$377m beat expectations by a respectable 3.2%, although statutory losses per share increased. Trade Desk lost US$0.04, which was 148% more than what the analysts had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Trade Desk


Taking into account the latest results, the current consensus from Trade Desk's 18 analysts is for revenues of US$1.58b in 2022, which would reflect a decent 13% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 50% to US$0.10. Before this earnings report, the analysts had been forecasting revenues of US$1.58b and earnings per share (EPS) of US$0.10 in 2022. So the consensus seems to have become somewhat more optimistic on Trade Desk's earnings potential following these results.

The consensus price target rose 9.4% to US$78.93, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Trade Desk, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$48.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trade Desk's past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 29% growth on an annualised basis. That is in line with its 31% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Trade Desk is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Trade Desk's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Trade Desk going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Trade Desk , and understanding these should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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