Trade Desk Gains 7% On 4Q Earnings Beat, Strong Outlook

Trade Desk stock closed 6.7% higher on Friday after the company reported better-than-expected 4Q results. Additionally, the advertising technology company’s 1Q revenue outlook exceeded the Street’s estimates.

Trade Desk’s (TTD) 4Q non-GAAP earnings more than doubled to $3.71 per share year-on-year and surpassed analysts’ expectations of $1.88 per share.

Revenue surged 48% to $319.9 million and topped the consensus estimate of $292.5 million. Trade Desk’s CEO, Jeff Green, said “While 2020 was a uniquely challenging year, it was also a turning point for our industry and our company. We won more share in our fastest growing channels such as CTV and Audio, which helped drive record ad spend of $4.2 billion on our platform in 2020.” (See Trade Desk stock analysis on TipRanks).

For 1Q, Trade Desk forecasted non-GAAP earnings per share of between $214 million and $217 million. The consensus estimate for earnings is pegged at $209.4 million.

Following the earnings release, Wells Fargo analyst Brian Fitzgerald raised the stock’s price target to $1,000 (10.7% upside potential) from $900 and reiterated a Buy rating.

In a note to investors, Fitzgerald said, “We believe Connected TV momentum accelerated in the quarter–we estimate that YY growth exited 4Q at the highest level in 2020–and believe TTD remains well positioned to take share in an environment characterized by increasing regulatory scrutiny for big tech and increasing advertiser desire to diversify away from the walled gardens and user-generated content.”

Overall, consensus among analysts is a Moderate Buy based on 7 Buys and 5 Holds. The average analyst price target of $916.82 implies upside potential of about 1.5% from current levels. Shares have gained more than 186% over the past year.

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