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On Friday, BofA Securities maintained a positive stance on The Trade Desk (NASDAQ:TTD) stock, reiterating its Buy rating and a $130.00 price target. The endorsement comes after The Trade Desk reported first-quarter earnings that surpassed expectations, with both revenue and adjusted EBITDA exceeding forecasts. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score, and analysis suggests the stock is currently trading below its Fair Value.
The Trade Desk’s revenue saw a 25% year-over-year increase to $616 million, outpacing BofA’s projection of $575 million. Similarly, adjusted EBITDA rose to $208 million, significantly higher than the anticipated $145 million. These robust results were attributed to strategic changes implemented after the company faced challenges in the fourth quarter of 2024. The company maintains impressive profitability metrics, with a gross margin of 80.11% and strong liquidity, as evidenced by a healthy current ratio of 1.81. Want deeper insights? InvestingPro subscribers have access to over 15 additional key metrics and ProTips.
According to BofA Securities, The Trade Desk’s recent performance suggests it is well-positioned to resume strong growth. Factors contributing to this outlook include market share gains, particularly those benefiting the open internet, and growth in Connected TV (CTV) as publishers increase supply to be monetized. Additionally, new product innovations such as Kokai and OpenPath were highlighted as tools that enable advertisers and publishers to efficiently allocate advertising dollars and connect supply with demand. With a market capitalization of $29.44 billion and consistent revenue growth, the company demonstrates strong market presence and execution capability.
Despite potential macroeconomic headwinds, The Trade Desk’s guidance for the second quarter indicates an expectation of at least 17% growth. This forecast suggests that the company is poised to continue delivering solid growth even amidst an uncertain economic environment. For comprehensive analysis including detailed valuation metrics and growth projections, check out the full Pro Research Report available exclusively on InvestingPro.
In other recent news, The Trade Desk has reported a significant 25% year-over-year revenue increase for the first quarter, surpassing expectations and leading to positive adjustments in analyst estimates. Jefferies raised its price target for the company to $82, citing strong revenue growth and an increased adjusted EBITDA estimate for fiscal year 2025. Morgan Stanley (NYSE:MS) also lifted its price target to $80, highlighting the company’s rebound from previous shortfalls and its encouraging second-quarter outlook. Stifel maintained a Buy rating with an $87 target, noting The Trade Desk’s strong performance and the growing adoption of its Kokai platform. MoffettNathanson adjusted its price target to $75, acknowledging the company’s robust market positioning but expressing some concerns about profitability and competition. Meanwhile, Citi increased its target to $82, emphasizing the positive impact of Kokai’s adoption and the company’s strategic reorganization. Despite macroeconomic challenges, analysts generally express confidence in The Trade Desk’s market leadership and future growth potential.
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