Trump signs order raising Canada tariffs to 35% from 25%
Friday saw a reaffirmation from UBS analysts of a Buy rating and an $80.00 price target for The Trade Desk stock (NASDAQ:TTD). The company, which has demonstrated robust revenue growth of 25.07% over the last twelve months and maintains a strong financial health score of "GREAT" according to InvestingPro analysis, received an improved revenue growth estimate for FY25 to 16.4% year-over-year, up from the previous 15.6%, and an increased projection for EBITDA margins to 38.6% from the earlier 38%. These adjustments were based on positive outcomes from the first quarter, a second quarter guidance that surpassed concerns, and a cautious stance on potential macroeconomic risks in the second half of 2025.
UBS noted that The Trade Desk’s guidance for the second quarter does not factor in additional macroeconomic risks, despite the company experiencing pressure in specific sectors such as Home & Garden and Personal Finance, which together accounted for 14% of the company’s spend in FY24. The analyst pointed out that while skeptics may not be fully convinced due to ongoing competition from Amazon (NASDAQ:AMZN) and expectations of a subdued Upfronts advertising season, The Trade Desk’s first-quarter performance indicated a move in the right direction.
The adoption of The Trade Desk’s new product, Kokai, is reportedly ahead of schedule, which bolsters confidence in the company’s trajectory. UBS argues that the market sentiment surrounding the product migration is poised to improve.
In conclusion, UBS analysts found The Trade Desk’s first-quarter results and second-quarter guidance to be impressive, especially within the context of a challenging environment for brand advertising. With an impressive gross profit margin of 80.11% and a PEG ratio of 0.61 suggesting potential undervaluation relative to growth, the firm’s bullish stance is further supported by expectations of revenue acceleration in FY26, driven by increasing contributions from connected TV (CTV) content partnerships, expanding retail media, and the anticipated boost from midterm elections. For a comprehensive analysis of TTD’s valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, The Trade Desk reported substantial first-quarter earnings, showcasing a 25% year-over-year revenue increase to $616 million, surpassing expectations. The company’s adjusted EBITDA also rose significantly to $208 million, exceeding forecasts, as noted by BofA Securities. Analysts from Susquehanna and BMO Capital Markets highlighted the company’s impressive performance, with Susquehanna maintaining a price target of $135 and BMO setting it at $115. Jefferies and Morgan Stanley (NYSE:MS) also raised their price targets to $82 and $80, respectively, following the company’s robust earnings report.
The Trade Desk’s guidance for the second quarter of 2025 suggests a positive outlook, with projected revenue of at least $682 million and adjusted EBITDA of $259 million, according to BMO. The firm’s strategic changes, particularly the adoption of its Kokai platform, have been instrumental in its success, with BMO noting a 40% rise in adjusted EBITDA above consensus. Morgan Stanley’s analysis suggests that the company’s recent shortfall was likely temporary, and they have increased their EBITDA estimates for the coming years.
The Trade Desk’s diversified growth avenues, including connected TV, retail media, and international expansion, have been key drivers, according to Susquehanna. Despite potential macroeconomic headwinds, the company’s strategic decisions and product updates appear to be paying off, with Jefferies expressing confidence in its continued growth. The firm’s position as a leading independent demand-side platform and its leadership in connected TV are expected to support its trajectory, as highlighted by Morgan Stanley.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.