Shares of The Trade Desk (NASDAQ: TTD) were falling today as a solid earnings report wasn’t enough to please investors in the high-priced ad tech stock.
As a result, shares were down 6.9% as of 11:52 a.m. ET on Friday.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
The Trade Desk came into the third-quarter earnings report with a sky-high valuation, which seemed to be the reason the stock fell, since investors wanted a wider beat than they got.
Revenue in the quarter rose 27% to $628 million, which beat the consensus at $619.9 million. The company also saw strong margin expansion on the basis of generally accepted accounting principles (GAAP) as investments like its Kokai AI platform upgrade pay off.
Customer retention remained above 95%, continuing a quarterly streak that has lasted for 10 years, and its Unified ID 2.0 protocol continues to extend its reach, forging partnerships with Roku and Spotify.
Its GAAP operating income nearly tripled to $108.5 million as spending on technology and general and administrative expenses was mostly flat. On an adjusted basis, earnings per share rose from $0.33 to $0.41, ahead of the consensus at $0.39.
CEO Jeff Green expressed optimism for the fourth quarter, saying, “As we enter our business time of year and look ahead of 2025, we have never been in a better position to capture greater share of the $1 trillion advertising [total addressable market].”
The company expects revenue of at least $756 million, representing at least 25% growth from the quarter a year ago.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to total around $363 million, showing a margin of close to 50%.
With the stock trading at a price-to-earnings ratio around 200 based on GAAP earnings, it’s understandable why shares are falling, but The Trade Desk seems well positioned for long-term growth after the latest report.
Before you buy stock in The Trade Desk, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and The Trade Desk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $912,352!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
