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On Friday, BMO Capital Markets maintained its Outperform rating on The Trade Desk (NASDAQ:TTD) shares, with a steady price target of $115.00. The firm’s analysts highlighted the company’s impressive first-quarter performance, which surpassed expectations. The Trade Desk, currently valued at $29.4 billion, reported a 7% revenue increase and a 40% rise in adjusted EBITDA above consensus, attributed to a fourth-quarter catch-up and higher-than-anticipated adoption of its Kokai platform. According to InvestingPro data, the company has maintained strong revenue growth of 25% over the last twelve months.
The company’s guidance for the second quarter of 2025 also indicates a positive outlook, with projected revenue of at least $682 million and adjusted EBITDA of $259 million, slightly ahead of market expectations by 1% and 2%, respectively. This forecast is seen as a reassuring sign following the sell-off after the fourth-quarter earnings. InvestingPro analysis shows the company maintains an impressive 80% gross profit margin and has received a "GREAT" financial health score, suggesting strong fundamentals despite recent market volatility.
The accelerated adoption of Kokai is a significant factor in The Trade Desk’s performance, with two-thirds of its customers having transitioned to the platform. Kokai has been instrumental in reducing the cost per unique reach by 42%, offering a considerable value proposition.
Despite the positive assessment and reiteration of the $115 price target, BMO analysts suggest that The Trade Desk may require additional time and consistent execution before its stock multiple can meaningfully recover to its previous levels. The company’s current trajectory indicates a potential for continued growth and stability in the upcoming quarters.
In other recent news, The Trade Desk reported first-quarter earnings that exceeded expectations, with revenue increasing by 25% year-over-year to $616 million and adjusted EBITDA rising to $208 million. BofA Securities maintained its Buy rating with a price target of $130, highlighting strategic changes and product innovations like Kokai and OpenPath as key contributors to the company’s performance. Similarly, Jefferies raised its price target to $82, citing robust revenue growth and adjustments in revenue and EBITDA estimates for fiscal year 2025. Morgan Stanley (NYSE:MS) also increased its price target to $80, noting the company’s rebound from previous shortfalls and its unique position in the Connected TV category. Stifel reiterated a Buy rating with an $87 target, emphasizing the strong adoption of The Trade Desk’s Kokai platform and its competitive edge in the digital advertising space.
MoffettNathanson adjusted its price target to $75 while maintaining a Neutral rating, pointing out concerns about The Trade Desk’s operating leverage and potential competition from Amazon (NASDAQ:AMZN). Despite these challenges, the firm acknowledged the company’s strong market position and recent performance. The Trade Desk’s guidance for the second quarter suggests a 17% growth, indicating continued optimism amidst macroeconomic uncertainties. Analysts from various firms have highlighted the company’s strategic initiatives and market positioning as factors supporting its growth trajectory.
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