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

Zacks Equity Research

In the latest trading session, The Trade Desk (TTD) closed at $207.05, marking a -1.58% move from the previous day. This change lagged the S&P 500's 0.49% loss on the day. At the same time, the Dow lost 0.59%, and the tech-heavy Nasdaq lost 0.8%.

Coming into today, shares of the digital-advertising platform operator had lost 19.05% in the past month. In that same time, the Computer and Technology sector gained 3.08%, while the S&P 500 gained 3%.

TTD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.67, up 3.08% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $164.26 million, up 38.23% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.21 per share and revenue of $655.61 million, which would represent changes of +18.89% and +37.36%, respectively, from the prior year.

Any recent changes to analyst estimates for TTD should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.11% higher. TTD is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that TTD has a Forward P/E ratio of 65.54 right now. For comparison, its industry has an average Forward P/E of 26.15, which means TTD is trading at a premium to the group.

We can also see that TTD currently has a PEG ratio of 2.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.65 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 153, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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