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Deep Dive: The Trade Desk (TTD) dated 10 Feb 2022

The Trade Desk (TTD) operates a programmatic advertising platform. Instead of advertisers simply buying ad space on a particular social media platform or on a specific mobile app, it uses high-speed computers and sophisticated algorithms to match the ads with the right viewers.

It offers an omnichannel platforms tapping into a variety of formats such as social media, connected TV, audio, mobile, etc. Trade Desk is a global company, having presence in Western Europe and Asia, on top of United States.


Source: Q2 2021 Investor Presentation



The Trade Desk works with ad agencies to empower them to realize the full impact of their campaigns and optimize them in real time. As the company says, it is "an enabler, not a disruptor”.


Using their industry-leading AI Koa™ which analyses data from across the internet, to provide insights and recommendations match the ads with the right viewers, in the most efficient and effective way. With Koa™, its customers can tap into data analysed from over 600 billion queries each day, more than 100x the volume of global search.

According to report by GlobeNewswire, the total addressable market (T.A.M.) of the advertising industry is expected to cross $1 trillion over the coming decade. The Trade Desk generated revenue of $836 million Fiscal Year 2020, which helps illustrate its huge potential for growth in the coming years.

(Source: https://www.globenewswire.com/news-release/2021/11/18/2337022/28124/en/Global-Digital-Advertising-Market-Analysis-Forecasts-2015-2020-2021-2025F-2030F.html)


Source: https://www.statista.com/statistics/237974/online-advertising-spending-worldwide/



Source: Data from Koyfin.com



Growth in share value of the stock is loosely correlated with its growth in its revenue, earnings and assets. Over the past 5 years, these 3 financial metrics grew by 89% per year on average, which explains its 85% p.a. CAGR in its market value. From its Trailing-Twelve-Month result and the enormous T.A.M. that is still projected to grow by 15% per year over the next decade, we can extrapolate and project the company’s future growth.



The Trade Desk (TTD) Daily Chart, 4-year



Since its debut, the 250-days Moving Average had been acting as a support for its share price for The Trade Desk (TTD). Since 2017, using bullish crossover of KST indicator when the share price was trading at or below this moving average had offered investors to buy the stock after some price correction. The next 2 support levels are at $55 and $45.


*Note: TTD is reporting earnings on 16 Feb 2022, thus price action volatility can be expected in the reporting week.



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