To The Moon

The best-performing concepts is Ads. Considering the different perceptions of the stock, this time TigerPicks chose $Trade Desk Inc.(TTD)$ to have a fundamental highlight to help users understand it better.

$Trade Desk Inc.(TTD)$

The Trade Desk, Inc. operates as a technology company in the digital advertising industry, providing a robust platform that enables ad buyers to create, manage, and optimize digital advertising campaigns across various channels, including display, video, audio, and social media.

The Trade Desk reported its Q1 FY25 earnings last week, where revenue and earnings beat expectations as the company saw acceleration in Kokai platform adoption, with full adoption targeted by the end of the year. Plus, the management sounded optimistic about the latest court rulings against $Alphabet(GOOG)$ $Alphabet(GOOGL)$ , which they believe will lead to a fairer and more competitive marketplace for the open internet, thus leading to higher market share for the company.

As an existing investor, the Q1 earnings were a strong indication that the management’s long-term strategies are yielding results, while its fundamentals remain strong.

Strong progress on Kokai adoption, superior return on ad spend

The Trade Desk reported its Q1 FY25 earnings last week, where revenue grew 25% YoY to $616M, beating estimates by over 6%, with adjusted EBITDA growing over 28% YoY to $208M, with a margin expansion of 100 basis points year-over-year.

During the earnings call, the management attributed their outperformance in the quarter to organizational updates that led to accelerated adoption of their Kokai platform, while their engineering teams continued to ship updates at a faster rate.

Q1 FY25 Earnings Slides: Growth trend of operating metrics

At the moment, around two-thirds of their clients are using the Kokai platform, and the management expects all clients to be using it by the end of the year, as the platform combines their client needs with a strong point of view to deliver the most efficient return on ad spend.

While the management continues to iterate on the product, clients that have already adopted Kokai are seeing a 42% reduction in cost per unique search, 24% lower cost per conversion, and 20% lower cost of acquisition.

These are some of the customer success examples that Jeff Green, CEO of The Trade Desk, explained how Kokai is their “biggest engineering achievement,” as it helps clients unlock the full value and performance potential of the open internet, compared to the “walled gardens” of $Meta Platforms, Inc.(META)$ , $Amazon.com(AMZN)$, where measurement disparities over time create misalignment for marketers.

The Open Internet becomes more competitive, positioning The Trade Desk to gain market share.

Meanwhile, there have been massive shifts in the advertising landscape that have upgraded the prospects of the open internet, which position The Trade Desk more favorably than before to win greater market share in the coming quarters and years.

When I am talking about “massive shifts” in the advertising space, I am talking about Google, which has been declared an illegal monopoly in two separate instances in 2025 by the US courts, along with both Google and Meta, which have both been under scrutiny for their ad auction mechanics.

The way I see it, these shifts point to a more fair and more competitive internet, which is favorable to The Trade Desk, where Google DV360 and Amazon DSP will focus on their own properties. In the meantime, CTV (Connected TV) companies are leading the supply dynamics of the open internet and have increasingly adopted UID2 (Unified ID 2.0), an industry-wide approach to identity that puts control and privacy at the forefront, which allows them to monetize their inventory far more efficiently.

Buy Or Sell TTD Stock?

With the management’s reorganization initiative from the previous quarter starting to yield results in the form of faster product iteration and accelerated customer adoption to Kokai, I believe that the management will be able to navigate the current macroeconomic landscape.

TTD value chain

This is especially true as organizations are increasingly putting a premium on the efficacy of marketing their products, resulting in a shift away from the walled gardens towards premium inventory on the open internet that The Trade Desk’s Kokai platform helps unlock.

As a result, I will reiterate my “buy” rating with a price target of $86, representing an upside of 21% from its current levels.

Stock Price Forecast:

Here are the target price forecasts for the next 12 months from analysts.

Based on 33 Wall Street analysts offering 12 month price targets for Trade Desk in the last 3 months. The average price target is $91.79 with a high forecast of $145.00 and a low forecast of $48.00. The average price target represents a 29.21% change from the last price of $71.04.

Resource:

https://seekingalpha.com/article/4785126-ttd-q1-upgrading-my-price-target-amid-stellar-earnings

https://seekingalpha.com/article/4784768-trade-desk-time-to-buy-before-stock-rebounds-further

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