Advertisements and technology may seem to make a strange pair. But adtech provider Trade Desk made it to the big leagues, to the Nasdaq 100, because it combined tech innovation with digital advertising.
Shares are in a cup base with a buy point of 91.85, according to IBD MarketSmith. The growth stock has nearly doubled from a closing price of 44.83 on Dec. 30 and is among the IBD 50 Stocks To Watch.
Trade Desk joined the Nasdaq 100 index on July 17. The index comprises the 100 largest nonfinancial companies in the Nasdaq composite and includes major stocks such as Apple, Microsoft and Meta Platforms.
The news was announced July 12, and shares surged past its 25% profit target from an earlier base at that time.
The growth stock leads the commercial services advertising group. The Composite Rating is an impressive 95 while the Relative Strength Rating matches it at 95 and shows an improvement from 79 six months back. The EPS Rating of 97, out of 99, is nearly perfect.
Sales growth ranged between 21% and 45% over the past seven quarters, according to MarketSmith.
Earnings growth has been more uneven. After a decline in the fourth quarter, earnings rebounded in the two most recent quarters. In Q2, earnings of 28 cents per share showed a 40% increase from the prior year's quarter with sales of $464.3 million up 23%.
The growth stock fell below its 50-day moving average after earnings came out Aug. 9. Third quarter revenue guidance of $485 million suggested 23% growth, but a lower expected EBITDA margin likely pulled the stock down.
The stock regained the 50-day line last week.
Growth Stock Offers AI Integration For Marketers
Trade Desk offers a cloud base advertisement service to companies through different ad formats and channels, including connected TV, display, audio on computers, mobile devices and streaming media.
In June, the company launched an AI-powered platform, called Kokai, that followed its earlier AI venture Koa. Together, Trade Desk's AI capabilities help marketers optimize their ad strategy using its ad technology.
The stock went public in September 2016 at an IPO price of 18 a share. Shares popped on the first day of trading and hit an all-time high 104.09 in November 2021.
Mutual funds own 47% of shares outstanding. The Accumulation/Distribution Rating of B- also shows strong interest from fund managers. Funds owning TTD stock include JPMorgan Large Cap Growth Fund (SEEGX) and Barron Asset Fund Retail (BARAX). The Virtus Mid-Cap Growth Fund (PHSKX) has a 3% holding in the growth stock.
Exchange traded funds that hold shares include Vanguard Mid-Cap ETF and the iShares Russell Mid-Cap Growth ETF.
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