One-glance verdict
Undervalued
$73.34 our estimate vs market $12.76
Wall Street consensus: $13.53 (-81.5% lower than our fair-value estimate)
83% below our estimate, below the bear case
Fundamentals snapshot
The Trade Desk, Inc.
TTD · NGM · Communication Services · Advertising Agencies
Current price
$12.76
52-week range
$11.62 - $51.62
Market cap
$6.03B
Balance sheet
Healthy
8.58x Adequate
Net cash $1.05B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 3.2% last year.
- Reward Returns 15.4% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 668.4% above its 5-year average P/E.
What this company does
The Trade Desk, Inc.
The Trade Desk is a tech company that helps businesses advertise online across different platforms like streaming TV and mobile apps. Most of their money comes from charging these businesses to run their ad campaigns, which matters because it shows they have a solid way to make money.
How the company got here
The Trade Desk was founded in 2009 by Jeff Green and Dave Pickles, who met while working at Microsoft. Their vision was to create a technology-first platform for buying digital advertisements. The company quickly grew, expanding beyond initial digital display ads to include mobile, video, and audio advertising. A major turning point was its initial public offering (IPO) in 2016, which provided significant capital and raised its profile as a leading independent advertising technology company. In 2017, The Trade Desk acquired Adbrain, a company specializing in cross-device identity, to enhance its data and identity capabilities. This strategic move helped solidify its position in the evolving digital advertising landscape.
What it actually does
The Trade Desk operates a technology platform that helps businesses and advertising agencies buy and manage digital advertisements. Think of it as a sophisticated control center for advertising campaigns. Instead of directly showing ads on its own websites or apps, The Trade Desk provides the tools for advertisers to place their ads across a vast network of websites, apps, and connected TV channels. This platform allows them to target specific audiences, manage their spending, and measure how well their ads are performing, all in a data-driven way.
Self-service, Cloud-based Ad Buying Platform
This is the core of The Trade Desk's business, making up the vast majority of its revenue. It's a software platform that advertisers and agencies use to plan, buy, manage, and analyze their digital ad campaigns. This platform operates in the 'open internet,' meaning it's not limited to a single company's ecosystem like some social media platforms. Advertisers pay to use this platform to reach consumers across various devices and formats, from display ads on websites to video ads on streaming services.
Connected TV (CTV) Advertising
This segment focuses on advertising specifically for connected televisions, which are smart TVs that can stream content over the internet. As more people cut the cord from traditional cable TV and opt for streaming services, advertising on CTV has become increasingly important. The Trade Desk provides tools for advertisers to place ads within streaming apps and on smart TV platforms, allowing them to reach audiences who are watching content on these devices. This is a significant and growing area for the company.
Digital Audio Advertising
This part of the business involves placing advertisements within digital audio content, such as podcasts, music streaming services, and internet radio. As people increasingly consume audio content on their devices, advertisers see this as another way to reach potential customers. The Trade Desk's platform enables advertisers to target listeners based on their interests and behaviors while they are listening to digital audio.
Mobile Advertising
The Trade Desk also facilitates advertising on mobile devices, including smartphones and tablets. This encompasses various ad formats within mobile apps and mobile websites. Given the pervasive use of mobile devices, this segment allows advertisers to connect with consumers on the go, utilizing data to ensure ads are relevant to the user's context and interests.
What management is betting on now
The Trade Desk's management is focused on several key strategic priorities to drive future growth. A major emphasis is on strengthening its position in connected TV (CTV) and retail media advertising, recognizing these as rapidly expanding channels. They are also heavily investing in identity solutions, like Unified ID 2.0, to help advertisers target audiences effectively in a privacy-conscious world. Furthermore, the company is working to enhance transparency and efficiency within the advertising supply chain, aiming to make programmatic advertising more understandable and effective for buyers. This includes leveraging artificial intelligence (AI) to optimize campaigns and provide deeper insights.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$224.62M
FY2024 Q4
$179.21M
FY2025 Q1
$232.32M
FY2025 Q2
$119.77M
FY2025 Q3
$158.35M
FY2025 Q4
$285.27M
FY2026 Q1
$279.06M
FY2026 Q2
$140.37M
Revenue
$715.06M
Net income
$64.39M
Diluted EPS
0.14
Operating cash flow
$153.59M
Free cash flow
$140.37M
Fetching…
Sources
Revenue
$688.86M
Net income
$40.00M
Diluted EPS
0.08
Operating cash flow
$391.81M
Free cash flow
$279.06M
Fetching…
Sources
Revenue
$846.79M
Net income
$186.95M
Diluted EPS
0.39
Operating cash flow
$311.59M
Free cash flow
$285.27M
Fetching…
Sources
Revenue
$739.43M
Net income
$115.55M
Diluted EPS
0.23
Operating cash flow
$224.69M
Free cash flow
$158.35M
Fetching…
Sources
Revenue
$694.04M
Net income
$90.13M
Diluted EPS
0.18
Operating cash flow
$165.01M
Free cash flow
$119.77M
Fetching…
Sources
Revenue
$616.02M
Net income
$50.68M
Diluted EPS
0.10
Operating cash flow
$291.43M
Free cash flow
$232.32M
Fetching…
Sources
Revenue
$741.01M
Net income
$182.23M
Diluted EPS
0.36
Operating cash flow
$199.40M
Free cash flow
$179.21M
Fetching…
Sources
Revenue
$628.02M
Net income
$94.16M
Diluted EPS
0.19
Operating cash flow
$273.32M
Free cash flow
$224.62M
Fetching…
Sources
Is it cheap or expensive?
Fair value $73.34 vs current price $12.76
Wall Street consensus is the average analyst price target: $13.53 (-81.5% lower than our fair-value estimate).
Our most-likely fair value is $73.34 a share — about 474.8% above today's price of $12.76, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $1.1B - more cash than debt. Interest coverage 8.6x.
Net debt
$-1.05B
Interest coverage
8.58x
The Trade Desk, Inc.'s profit covers its interest bill about 8.6 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
TTD
BASELINE
The Trade Desk, Inc.
Total debt $434.11M Interest coverage 8.58x This is the baseline the peer rows are being compared against.
Total debt $120.79B Interest coverage 175.32x +1,944% vs TTD Carries about 20.4x more debt cushion than TTD.
Total debt $251.64B Interest coverage 35.17x +310% vs TTD Carries about 4.1x more debt cushion than TTD.
Total debt $416.98M Interest coverage 5.17x -40% vs TTD Carries about 1.7x less debt cushion than TTD.
Total debt $40.91M Interest coverage -3.16x -100% vs TTD This peer has almost no interest-payment cushion compared with TTD.
Total debt $148.19M Interest coverage 82.39x +861% vs TTD Carries about 9.6x more debt cushion than TTD.
What you should know
The case for and against TTD
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.2% last year.
-
Returns 15.4% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 668.4% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
15.37x
Forward P/E
12.70x
P/B
2.33x
P/S
2.02x
EV/EBITDA
7.04x
PEG ratio
0.92x
Profitability
How much profit each dollar creates
Gross margin
76.9%
Operating margin
14.2%
Net margin
13.6%
ROE
15.4%
ROA
6.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.17x
Current ratio
1.72x
Quick ratio
1.68x
Total debt
$434.11M
Total cash
$1.49B
Growth
How the business has been compounding
Revenue TTM
$2.99B
Revenue 5Y CAGR
24.7%
EPS TTM
0.83
EPS 5Y CAGR
101.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.08B
Free CF TTM
$795.71M
FCF margin
26.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
—