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On Friday, Citi analyst Ygal Arounian adjusted the price target for The Trade Desk (NASDAQ:TTD) shares, increasing it to $82 from the previous $63, while maintaining a Buy rating on the company’s stock. The Trade Desk, currently valued at $29.4 billion, reported a substantial beat in its earnings, with first-quarter revenue for 2025 showing a 25% year-over-year increase, maintaining its impressive five-year revenue CAGR of 30%. Additionally, the company’s guidance for the second quarter was set higher than anticipated, despite broader economic concerns. According to InvestingPro analysis, the stock has shown strong momentum with a 10.7% gain over the past week.
The analyst highlighted that Kokai, previously a significant factor in the company’s fourth-quarter earnings miss, has now become a positive influence. Adoption rates are surpassing expectations, which is a pivotal shift for The Trade Desk. Arounian also noted the positive impacts of the company’s recent reorganization and its intensified focus on building brand relationships. InvestingPro data reveals the company’s strong financial position, with an impressive 80.1% gross profit margin and robust cash flows that comfortably cover its obligations.
While management at The Trade Desk did express some caution regarding the macroeconomic environment, suggesting the possibility of lower sequential growth in the second quarter, there was no explicit indication of budget cuts from brand advertisers through May. The analyst interpreted The Trade Desk’s strong performance as solid evidence of its market leadership and believes that concerns about competition, particularly from Amazon (NASDAQ:AMZN), may be overstated.
The new price target reflects Citi’s confidence in The Trade Desk’s position in the market, with the analyst citing a 30x estimated EBITDA multiple for 2026 as justification for the Buy rating. Despite some macroeconomic headwinds, The Trade Desk’s recent outperformance has bolstered analyst confidence in the company’s near-term prospects.
In other recent news, The Trade Desk has reported a robust first quarter for 2025, with revenue reaching $616 million, marking a 25% increase compared to the previous year. This figure surpassed analyst expectations by approximately $40 million, showcasing the company’s strong performance. Earnings per share were reported at $0.33, exceeding the forecasted $0.25, highlighting a 32% beat over estimates. The Trade Desk’s adjusted EBITDA came in at $208 million, significantly higher than anticipated, with a margin of 33.7%. The company’s core product, Kokai, has seen substantial adoption, with two-thirds of clients utilizing it, contributing to lower costs and increased efficiency in campaigns. Analyst firms like William Blair have maintained an Outperform rating, reflecting confidence in The Trade Desk’s strategic direction and market position. Evercore ISI, however, has kept an In Line rating, noting that while the company’s performance is strong, challenges remain in fully restoring its track record. Despite macroeconomic pressures, The Trade Desk’s outlook for the second quarter of 2025 remains positive, with projected revenue of $682 million aligning with consensus estimates.
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