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The Trade Desk (TTD) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

The Trade Desk (TTD) closed the most recent trading day at $207.31, moving -1.27% from the previous trading session. This move lagged the S&P 500's daily loss of 0.08%. At the same time, the Dow lost 0.07%, and the tech-heavy Nasdaq lost 0.59%.

Coming into today, shares of the digital-advertising platform operator had gained 11.95% in the past month. In that same time, the Computer and Technology sector gained 4.71%, while the S&P 500 gained 2.7%.

Wall Street will be looking for positivity from TTD as it approaches its next earnings report date. This is expected to be November 7, 2019. The company is expected to report EPS of $0.67, up 3.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $164.26 million, up 38.23% from the year-ago period.

TTD's full-year Zacks Consensus Estimates are calling for earnings of $3.21 per share and revenue of $655.61 million. These results would represent year-over-year changes of +18.89% and +37.36%, respectively.

Investors should also note any recent changes to analyst estimates for TTD. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TTD currently has a Zacks Rank of #3 (Hold).

Digging into valuation, TTD currently has a Forward P/E ratio of 65.41. This represents a premium compared to its industry's average Forward P/E of 28.04.

Meanwhile, TTD's PEG ratio is currently 2.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.38 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TTD in the coming trading sessions, be sure to utilize Zacks.com.


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