Trade Desk is Monday's pick for IBD 50 Stocks To Watch after the digital advertiser formed a bullish pattern on its chart. Trade Desk operates a digital advertising platform for advertisers, publishers and consumers.
The digital advertising leader ranks No. 1 out of 40 stocks in the Commercial Services-Advertising group, which holds the No. 90 spot out of 197 IBD industry groups.
Trade Desk Stock Winds Up
Trade Desk stock reached a record high Friday. Shares formed a three-weeks-tight pattern with a 121.44 buy point. Volume has trended lower than average since the company's last earnings report in early August.
Shares are nearing the 20% profit zone of a V-shaped base with a 102.67 buy point. Despite that weak pattern, which formed last summer, the stock has climbed 66% so far this year.
Digital Advertiser Is A Consistent Earnings Producer
Trade Desk beat second-quarter profit and sales forecasts on Aug. 8. Management also gave third-quarter sales guidance above views.
Trade Desk reports its third-quarter earnings on Nov. 7 after the market close. FactSet Q3 estimates show 39 cents-a-share profit, or 20% growth. This follows 8% to 39% increases over the prior three quarters.
Analysts project full-year 2024 profit to increase 28% then slow to 16% growth in 2025. The company holds a 15 out of 99 possible Earnings Stability factor, with a lower number showing more consistent earnings over the last three to five years.
The digital advertiser's revenue growth has ranged from 21% to 28% over the last seven quarters. And its third-quarter sales are expected to rise to $619.7 million, or 26%, with growth tapering modestly over the following two quarters.
Mutual funds have bolstered their positions in Trade Desk stock, with 1,717 owning shares in September, up from 1,709 in June and 1,677 in March. Its IBD Accumulation/Distribution Rating of A- indicates fairly heavy institutional buying over the last 13 weeks. Moreover, its 1.6 up/down volume ratio shows good demand for the stock over the last 50 days.
The stock holds a best-possible 99 Composite Rating and a 97 Earnings Per Share Rating.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
