BofA reiterates Buy on The Trade Desk, maintains $130 target

On Friday, BofA Securities maintained a positive outlook on The Trade Desk (NASDAQ:TTD) shares, with analyst Jessica Reif Ehrlich reaffirming a Buy rating and a $130.00 price target. The endorsement comes amid concerns over potential competition from Amazon (NASDAQ:AMZN)’s Demand-Side Platform (DSP) and the impact of its Prime Video inventory on the advertising market. According to InvestingPro data, The Trade Desk has demonstrated robust revenue growth of 25.6% over the last twelve months, though the stock has declined over 47% in the past six months.

Ehrlich addressed the competitive threat posed by Amazon, suggesting that its current strategy seems more focused on optimizing fill rates for Prime Video rather than aggressively pursuing a share of the connected TV (CTV) market on the open internet. The analyst noted that the bulk of Amazon’s DSP spending is on programmatic guaranteed purchases, which could pose a more significant risk to Google (NASDAQ:GOOGL)’s advertising spend than to The Trade Desk’s operations. With an impressive gross profit margin of 80.7% and strong cash flows that easily cover its obligations, The Trade Desk maintains a solid financial foundation. InvestingPro analysis reveals 16 additional key insights about the company’s financial health and market position.

Despite the looming presence of Amazon in the digital advertising space, Ehrlich expressed confidence in The Trade Desk’s ability to continue its growth trajectory and effectively compete. The Trade Desk has a history of holding its own against major players like Google, according to the analyst.

Furthermore, Ehrlich pointed out that Google’s ongoing regulatory challenges might lead to changes in its open internet strategy or result in remedies that could affect its existing business operations. This situation could potentially benefit The Trade Desk as the advertising landscape evolves.

The Trade Desk is a technology company that provides a platform for ad buyers to purchase and manage digital advertising campaigns across various formats and devices. With the continued expansion of digital advertising, companies like The Trade Desk are critical in enabling efficient and effective ad placement. The company’s financial health score is rated as GOOD by InvestingPro, which offers a comprehensive Pro Research Report analyzing the company’s market position, growth prospects, and valuation metrics among 1,400+ top US stocks.

In other recent news, The Trade Desk has been the focus of several analyst reports, highlighting both challenges and opportunities for the company. CFRA upgraded The Trade Desk’s stock rating to Buy with a price target of $97, citing the company’s enticing valuation despite a significant drop in share price. Analyst Angelo Zino maintained earnings per share estimates for 2025 and 2026 and noted that The Trade Desk is poised to benefit from growth drivers like connected TV and retail media. Meanwhile, Citi also maintained a Buy rating with a price target of $70, emphasizing The Trade Desk’s strong position in the connected TV space despite increased competition from Amazon.

RBC Capital revised its price target from $120 to $100, maintaining an Outperform rating, following insights from a non-deal roadshow with The Trade Desk’s management. The company acknowledged recent challenges but expressed confidence in its strategy for long-term market share gains. Truist Securities reaffirmed a Buy rating with a price target of $130, attributing recent stock declines to overstated concerns, particularly regarding the Kokai platform rollout and competitive pressures from Amazon.

Finally, Citi adjusted its price target to $70 from $108, reflecting a more competitive environment and challenges in the connected TV advertising landscape. Despite these hurdles, Citi analysts maintain that The Trade Desk remains a strong player in the market, with potential growth opportunities as the shift towards connected TV continues.

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