Citi analyst Ygal Arounian has revised the price target for Trade Desk (TTD, Financial), reducing it from $70 to $63 while maintaining a Buy rating on the stock. This adjustment comes as part of a broader evaluation of the internet sector ahead of the first quarter. The updated price target reflects anticipated impacts from tariff issues and a consequent softening of the macroeconomic environment.
According to the analyst, sectors such as digital advertising and e-commerce face the greatest exposure to these challenges. However, areas like web building services, tools for small businesses, and online dating platforms are less affected.
In this context, Citi identifies companies like VeriSign (VRSN), Wix.com (WIX), GoDaddy (GDDY), eBay (EBAY), and Criteo (CRTO) as relatively defensive due to their robust fundamentals. Conversely, firms including Wayfair (W), Trade Desk (TTD, Financial), Etsy (ETSY), and Bark (BARK) are considered more vulnerable to tariff-related challenges.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 32 analysts, the average target price for The Trade Desk Inc (TTD, Financial) is $92.54 with a high estimate of $150.00 and a low estimate of $39.00. The average target implies an upside of 73.72% from the current price of $53.27. More detailed estimate data can be found on the The Trade Desk Inc (TTD) Forecast page.
Based on the consensus recommendation from 39 brokerage firms, The Trade Desk Inc's (TTD, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Trade Desk Inc (TTD, Financial) in one year is $132.82, suggesting a upside of 149.33% from the current price of $53.27. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Trade Desk Inc (TTD) Summary page.
TTD Key Business Developments
Release Date: February 12, 2025
- Total Spend on Platform: Exceeded $12 billion for 2024.
- Annual Revenue: Surpassed $2.4 billion, a 26% year-over-year increase.
- Adjusted EBITDA: Over $1 billion for the year.
- Free Cash Flow: More than $600 million for the year.
- Q4 Revenue: $741 million, a 22% year-over-year increase.
- Q4 Adjusted EBITDA: $350 million, representing a 47% margin.
- Q4 Operating Expenses: $416 million, up 23% from the previous year.
- Adjusted Net Income for Q4: $297 million or $0.59 per fully diluted share.
- Net Cash Provided by Operating Activities in Q4: $199 million.
- Free Cash Flow in Q4: $177 million.
- Cash and Liquidity Position: Approximately $1.9 billion in cash, cash equivalents, and short-term investments at year-end.
- Share Repurchase: $57 million of Class A common stock repurchased in Q4.
- Q1 2025 Revenue Outlook: At least $575 million, reflecting 17% year-over-year growth.
- Q1 2025 Adjusted EBITDA Estimate: Approximately $145 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Trade Desk Inc (TTD, Financial) achieved a record-breaking year in 2024 with total spend on their platform exceeding $12 billion and revenue surpassing $2.4 billion, marking a 26% year-over-year growth.
- The company generated over $1 billion in adjusted EBITDA and delivered more than $600 million in free cash flow, highlighting the strength of their platform.
- The Trade Desk Inc (TTD) has made significant structural changes, including the largest reorganization in company history, to improve clarity in roles and responsibilities and streamline client-facing teams.
- The company is focusing on expanding brand direct relationships, which are growing 50% faster than the rest of their business, and increasing resource allocation on brands.
- The Trade Desk Inc (TTD) is investing heavily in AI to enhance targeting, optimization, forecasting, and identity measurement, positioning them for future growth.
Negative Points
- For the first time in 33 quarters, The Trade Desk Inc (TTD) fell short of their own expectations, missing their guidance due to a series of small execution missteps.
- The company experienced slower than anticipated rollout of their Kokai platform, impacting short-term performance.
- There were challenges in the fourth quarter due to a polarized political environment and lower GDP, which affected advertising budgets.
- The Trade Desk Inc (TTD) anticipates a modest increase in the growth rate of operating expenses in 2025, which may lead to some margin compression.
- The company faces competition from major players like Amazon, which is aggressively improving its DSP and expanding Prime Video ads, posing a competitive threat.
