🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Trade Desk shares hold as Wells Fargo keeps $115 target

EditorBrando Bricchi
Published 2024/05/16, 19:00
TTD
-

On Thursday, Wells Fargo (NYSE:WFC) maintained its Overweight rating and $115.00 price target on The Trade Desk (NASDAQ:TTD), a leading technology company in the advertising industry. The firm's positive outlook is based on the recent announcement that Netflix (NASDAQ:NFLX) will open up to The Trade Desk's programmatic demand with a start expected in the summer of 2024, which was seen as an unexpectedly positive development.

The Trade Desk is anticipated to benefit from this move, as it could enhance the company's strong second-half catalyst path. Additionally, the integration with Netflix is expected to further drive the network effects of The Trade Desk's Unified ID 2.0 (UID2) and Retailer-Specific Inventory (RSI) initiatives. This could also exert additional pressure on other companies in the sector that have yet to adopt similar strategies.

Wells Fargo highlighted that The Trade Desk's connection to Connected TV (CTV) publishers, which account for approximately 82% of U.S. CTV viewership according to Nielsen data, positions the company favorably. This includes a vast majority of premium Advertising Video On Demand (AVOD) and Subscription Advertising Video On Demand (SAVOD) services. The firm views The Trade Desk as evolving into a platform with network effects that benefit all members—advertisers, publishers, and retailers—as the network scales.

The firm also noted potential challenges for companies not yet integrated with The Trade Desk's offerings. Increasing costs of multi-homing, where advertisers and publishers distribute their content or advertising across multiple platforms, along with heightened regulatory scrutiny, could impact those not part of The Trade Desk's growing network.

InvestingPro Insights

As The Trade Desk (NASDAQ:TTD) forges ahead with strategic partnerships and technological advancements, its financial health and market performance provide a compelling narrative for investors. The company's robust gross profit margin, which stood at an impressive 81.29% for the last twelve months as of Q1 2024, underscores its efficiency in monetizing its services. Furthermore, the recent revenue growth of 24.88% during the same period signals strong demand for The Trade Desk's offerings in the dynamic advertising sector.

With an eye on the future, The Trade Desk holds more cash than debt on its balance sheet, an InvestingPro Tip that suggests a solid foundation for pursuing growth opportunities or weathering economic downturns. Additionally, the company's net income is expected to grow this year, reflecting analysts' confidence in its business model and market position. For those seeking deeper insights, InvestingPro offers 13 additional tips, including earnings revisions and valuation multiples, which can be explored at https://www.investing.com/pro/TTD.

Investors looking to leverage these insights for a more informed investment strategy can take advantage of a special offer: use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This promotion not only provides access to valuable InvestingPro Tips but also a comprehensive suite of tools to analyze market trends and investment potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.