Ahead of Trade Desk’s (TTD) Q2 earnings, the company rolled out a survey highlighting the growing shift of consumers from traditional TV to connected TV (CTV). This indicated that Trade Desk’s financial performance could get a significant boost from the shift towards internet TV, and so it proved to be.
Trade Desk delivered better-than-expected Q2 results, led by CTV and premium video. The cloud-based advertising technology platform provider’s Q2 revenues increased 101% to $280 million and came well ahead of the Street’s expectations of $262.8 million. Trade Desk’s earnings doubled to $0.18 a share and surpassed analysts’ estimate of $0.13. (See Trade Desk stock chart on TipRanks)
In response to the stellar Q2 performance, the company’s founder and CEO, Jeff Green, said that “every major market in the world is heading towards consumption of premium TV and movie content over the internet.” He stated that “CTV as a percentage of our business continues to grow very rapidly and is by far our fastest growing channel,” thanks to its products and the new platform, Solimar, that helps it in capitalizing on the growing adoption of CTV.
The company announced that the number of brands spending more than $1 million in CTV on its platform has more than doubled in the first half of the year.
Oppenheimer analyst Jason Helfstein also stressed upon the ongoing trend, saying, “Shift to AVOD (ad-supported video on demand) brings more spend.” Helfstein reiterated a Buy rating on Trade Desk post Q2 earnings and increased the price target to $95 (16.8% upside potential) from $85, reflecting “TTD’s ability to capitalize on linear TV budget shifting to CTV.”
He further added, “TTD is best positioned to capitalize on an underpenetrated CTV advertising market” and sees the company’s partnership with Sky in Europe and Disney+ Hotstar in India as future international growth drivers.
Notably, Trade Desk’s business is growing faster in the international market than in the U.S. Meanwhile, its partnerships with these companies provide access to most CTV ad impressions across these regions.
Along with Helfstein, the majority of the Street is also bullish on the stock. TTD’s Strong Buy consensus rating is based on 9 Buys and 2 Holds. With about 65% growth in its stock in one year, the average Trade Desk price target of $80.55 implies 1% downside potential from current levels.
Moreover, Trade Desk stock scores a “Perfect 10” on TipRanks Smart Score system.
Disclosure: Amit Singh held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
