The Trade Desk (TTD +5%) broke out to new all-time highs today after the company hosted it first-ever Investor Day on Wednesday. Analysts generally responded positively to management's presentation yesterday morning.
Here are some key excerpts from the Investor Day:
- TTD is an investment in programmatic advertising
for the whole internet:
- We're self-service omnichannel (all decisioned digital) software platform.
- 95%+ of our spend coming through MSAs and is relatively predictable.
- Our tech is measurably better at decisioning.
- We are objective and align our interests with media buyers.
- We have a massive TAM. 6. Best positioned to capture massive connected TV and international growth opportunities.
- Delivering BOTH revenue growth and profitability.
- We've been profitable since 2013.
- TTD's growth formula: base business + programmatic industry growth + (+95%) retention rate + same client/agency growth + new business + new channels + international growth
- TTD's 5
goals for next 5 years:
- Connected TV and video will be its largest channel, surpassing mobile.
- China will become a top 3 market.
- TTD's ID footprint will be larger than any single company's login footprint, and take down some walls around gardens -- CEO Jeff Green preduicted that a major social network will open up its platform to advertising(take down its walled garden) by the end of next year.
- TTD will grow data usage at 2x the pace of media spend.
- TTD will change media planning (which will change TV buying, social, and search).
- TTD also laid out long-term goals for a 15-20% take rate, a 35% operating margin and a 40% EBITDA margin.
The Trade Desk expects worldwide programmatic growth CAGR 21% through 2020 -- management noted that there is no reason to believe it can't continue to outperform the programmatic market in future.
Sentiment around ad-technology companies was poor because ad-tech stocks have languished as Facebook and Google have dominated the digital/programmatic advertising market within their aforementioned ‘walled garden' content. TTD seems to be the best programmatic advertising platform for the digital channels outside of Facebook and Google.
The chart looked good on the daily, weekly and monthly time frames, making a series of higher lows since testing support under 50 after reporting solid second quarter results in August. At the same time, short interest had risen to a record 13% of the float.
The Trade Desk has handily beat quarterly estimates every quarter since its IPO just over one year ago.
At $64/share TTD has a ~$2.8 billion market cap, which equates to ~9x sales estimates for the year.