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The Trade Desk (TTD) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

The Trade Desk (TTD) closed the most recent trading day at $192.11, moving +1.21% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.29%. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.19%.

Heading into today, shares of the digital-advertising platform operator had lost 1.45% over the past month, lagging the Computer and Technology sector's loss of 0.13% and the S&P 500's gain of 0.32% in that time.

TTD will be looking to display strength as it nears its next earnings release, which is expected to be November 7, 2019. On that day, TTD is projected to report earnings of $0.67 per share, which would represent year-over-year growth of 3.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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.

Investors should also note any recent changes to analyst estimates for TTD. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. TTD is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that TTD has a Forward P/E ratio of 59.13 right now. This represents a premium compared to its industry's average Forward P/E of 27.93.

It is also worth noting that TTD currently has a PEG ratio of 2.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TTD's industry had an average PEG ratio of 2.16 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 146, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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