Analysts revise Trade Desk stock price target after results

There are a lot of things a leader has to worry about, but Jeff Green probably has one of the best gigs in town.

“I’m much more concerned that the wave of opportunity is too big and that we’re not equipped to handle all the opportunities that come our way than that the wave doesn’t exist or is too small,” said Green, CEO and co-founder of The Trade Desk. (TTD) said during the company’s recent earnings conference call.

Related: Analyst Revises Trade Desk Stock Price Target Ahead of Earnings

Green’s enthusiasm was undoubtedly linked to the company’s second-quarter results, which beat Wall Street expectations.

“Our growth rate has far outpaced the rest of the digital marketing industry, as it has every quarter for the past several years,” he told analysts.

The Trade Desk, a programmatic marketing company, enables the purchase of media inventory across multiple channels, including display, video, audio, and connected TV, most commonly used to deliver video.

Green noted that the total global addressable digital advertising market has the potential to reach $1 trillion and added that The Trade Desk is well positioned to capture more than its fair share of that $1 trillion.

LAS VEGAS, NEVADA – JANUARY 6: (Left) Jeff Green, founder, CEO and chairman of The Trade Desk, is riding a wave of demand for programmatic advertising.

Greg Doherty/Getty Images

Trade Desk CEO: “We bring the best value to the market”

“I believe our success is based on consistent revenue growth of over 20% year over year for several years,” he told analysts. “In comparison, our ad-supported peers have experienced periods of much lower growth, or even stagnation in some cases.”

“That means we’re consistently gaining market share quarter after quarter and year after year,” Green added. “And I’m convinced that’s because we continue to bring the best innovation and value to the market.”

Related: Analyst Raises Trade Desk Stock Price Target After Netflix Deal

He also talked about Kokai, the AI-powered media buying platform the company launched last year.

“Kokai enables our customers to deploy data on their most loyal customers and use it as a seed to grow and harvest the next generation of loyal customers,” he said. “Kokai helps them target these new audiences across the thousands of destinations that make up the best of the open internet.”

“And it relies on AI to help them make sense of the roughly 15 million advertising opportunities we see every second and the hundreds of variables associated with each one,” Green added.

Green discussed the alphabet (GOOGLE) Current legal headaches during the question and answer period.

U.S. District Court Judge Amit Mehta ruled on August 5 that Google, a subsidiary of Alphabet Inc., illegally monopolized the search engine market through exclusive agreements with Apple. (AAPL) and others.

Related: Analysts examine impact of Google antitrust ruling on Apple stock price

Google also faces an antitrust trial next month in the Eastern District of Virginia over anticompetitive conduct in the ad tech space, which Bloomberg Law said “could be a seismic event, potentially determining whether Google remains a single entity or is fragmented into separate companies.”

“They’ve become a weaker competitor than they were in the past,” Green said. “And as I’ve said many times, we won in an unfair market. Imagine what we could do if we were competing in a fair market.”

“I think because of that, I believe we’ll win no matter what the outcome of this case is, but it’s still going to be fun to watch,” he noted.

The Trade Desk reported second-quarter earnings of 39 cents per share, up from 28 cents a year ago and beating the consensus estimate of 36 cents per share.

Analysts call for ‘solid quarter’

Revenue totaled $584.6 million, up from $464 million a year earlier and beating Wall Street forecasts for revenue of $578.1 million.

Looking ahead, the company expects third-quarter revenue of $618 million, above estimates of $605.5 million.

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TheStreet Pro’s Chris Versace liked the numbers and raised his price target on The Trade Desk shares from $110 to $120.

“Trade Desk continues to benefit from the overall mix shift toward digital advertising as advertisers seek to reach consumers,” he wrote in his Aug. 9 column.

“It also benefits from the increasing use of advertising-based business models on streaming video and digital audio platforms such as those found on Netflix. (NFLX) Disney (SAY) Warner Bros. Discovery (JMD) Amazon (AMZN) Spotify (PLACE) and others,” Versace added.

Several analysts adjusted their price targets following The Trade Desk’s earnings release.

RBC Capital raised the company’s price target to $120 from $110 and maintained an outperform rating on the stock.

The Trade Desk delivered a solid quarter amid mixed macroeconomic conditions, with rising revenue and strong profitability, the company said.

The company’s upgraded third-quarter guidance also stands out from its peers as The Trade Desk continues to benefit from several cyclical and secular factors, including market share gains from the walled gardens, but particularly within CTV, the company added.

Truist raised the company’s price target on Trade Desk to $108 from $105 and maintained a buy rating on the stock, citing the company’s higher earnings and “stronger” third-quarter guidance.

Trade Desk’s execution remains exceptional in a volatile digital advertising environment, with strong momentum and market share gains driven by the connected TV business given its rapid adoption in the U.S. and internationally, the company said.

KeyBanc analyst Justin Patterson raised the company’s price target on Trade Desk to $115 from $105 and kept an overweight rating on the stock.

According to the analyst, Trade Desk is clearly gaining market share in the advertising market, with the benefits of Kokai innovation and the Netflix partnership still to come.

Patterson said he believes revenue growth of more than 20% year-over-year is achievable in 2025 and 2026, with the potential for faster growth depending on regulatory decisions.

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