The Trade Desk Positioned To Dominate AdTech: Analyst Maintains Buy Rating And Raises Price Target

Needham analyst Laura Martin reiterated a Buy rating on The Trade Desk, Inc. TTD, raising the price target to $100 from $80.

TTD is the largest AdTech company under the analyst's coverage, expected to gain the most of the latest Generative AI trends. 

TTD has been growing its revenues by more than 20% per year, and the analyst expects this to continue through 2025, despite macro ad weakness.

Martin also remains bullish on TTD's pace of introducing new platforms and products.

The company launches a new platform every two years (e.g., Solimar, Kokai) and new product lines (Retail Media Nets, OpenPath.) every year, notes the analust.

The analyst also applauds TTD's strength in EBITDA margins, which have expanded by 1,000 basis points from 32% in 2019 (pre-COVID) to 42% in 2022.

The analyst thinks TTD to be the largest demand-side platform (i.e, buyer of ads) in the "Open Internet" with $7.8 billion of total ad spending using its platform, back in 2022. 

Based on the above, the analyst maintained FY23 revenue estimates at $1.9 billion (up 22% y/y), Adj. EBITDA of $740 million (up 11% y/y).

For FY24, the analyst maintained revenue estimates of $2.4 billion (up 23% y/y), Adj. EBITDA of $943 million (up 27% y/y).

For FY25, the analyst expects revenue of $2.9 billion (up 22% y/y), Adj. EBITDA of $1.2 billion (up 26% y/y).

Price Action: TTD shares are trading higher by 2.21% to $83.89 on the last check Tuesday.