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On Friday, Stifel analysts maintained a positive stance on The Trade Desk (NASDAQ:TTD) shares, reiterating a Buy rating and an $87.00 price target. The firm’s analysts highlighted that The Trade Desk’s first-quarter results surpassed expectations, with revenues 7% above and Adjusted EBITDA 41% higher than Wall Street’s predictions. The company’s robust financial health is evident in its impressive 80.11% gross margin and 25.07% year-over-year revenue growth. According to InvestingPro analysis, The Trade Desk maintains strong financial health with more cash than debt on its balance sheet. The second-quarter guidance aligned with the current quarter trends, although there was a note of caution echoed from some brands, mirroring the language of holding companies this quarter.
Stifel’s analysis pointed out that The Trade Desk’s strong performance in the first quarter might be attributed to increased usage of data within Kokai, its proprietary platform, which now boasts approximately two-thirds adoption rate. It is anticipated to reach full adoption by the end of the year. This uptake may alleviate some concerns regarding competitive pressures, especially from rivals like Amazon (NASDAQ:AMZN)’s Demand-Side Platform (DSP).
The Trade Desk’s Connected TV (CTV) segment was identified as the fastest-growing channel, continuing to expand despite the introduction of new inventory through Amazon Prime Video, which is exclusively available for purchase through Amazon. Stifel views the results as robust and maintains the thesis that The Trade Desk represents one of the most effective ways to engage in the transition from linear television to CTV advertising. While the stock trades at a relatively high P/E ratio of 75.54, InvestingPro data reveals it’s trading at a low P/E relative to near-term earnings growth, with 14 additional exclusive insights available to subscribers. However, the analysts acknowledged that it might take time for investors to fully acclimate to the competitive landscape within the industry.
In summary, the Stifel analysts expressed confidence in The Trade Desk’s current trajectory and the company’s strategic position in the evolving digital advertising space. The reiterated price target of $87.00 reflects this ongoing optimism in the stock’s potential. For a deeper understanding of TTD’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable insights.
In other recent news, The Trade Desk reported impressive financial results for the first quarter of 2025, with revenue reaching $616 million, marking a 25% year-over-year increase. This exceeded analyst expectations by 7%, and the company’s earnings per share (EPS) of $0.33 surpassed the forecasted $0.25. The Trade Desk’s adjusted EBITDA was $208 million, showing a robust performance that was 41% above Street forecasts. Analyst firms have responded positively to these developments; Citi raised the company’s stock price target to $82 with a Buy rating, highlighting the significant adoption of the Kokai platform as a positive influence. Meanwhile, MoffettNathanson adjusted its price target to $75, maintaining a Neutral rating, while Evercore ISI reiterated an In Line rating with a $90 target. The company also provided guidance for the second quarter, projecting revenue of $682 million and EBITDA of $259 million. Despite macroeconomic uncertainties, The Trade Desk’s strategic upgrades and focus on market leadership have bolstered analyst confidence in its near-term prospects.
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