Trade Desk is the IBD Stock of the Day amid an improved outlook for digital advertising growth in 2024 and tailwinds from the presidential election and the Paris Summer Olympics. Trade Desk stock has gained 37% this year.
On the stock market today, Trade Desk stock rose 4.6% to close at 100.44.
Trade Desk found support at its 50-day moving average, a key technical level. Trade Desk holds an entry point of 99.38 — its July 17 high.
The company's automated platform enables brands and ad agencies to buy online and mobile ads in real time, rather than in advance manually. In addition, Ventura, Calif.-based Trade Desk helps clients leverage online data to improve their targeted advertising.
Further, internet TV (also called connected TV) has been a growth driver for Trade Desk stock as more video streaming services become advertising supported.
Trade Desk's ad platform supports video streaming networks Roku, Walt Disney, Netflix and others. It also has partnerships with retailers Walmart and Target.
Meanwhile, Trade Desk stock is reclaiming its 21-day exponential moving average, a key technical level. IBD research has found that the biggest stock market winners tend to find support at the 21-day line after a breakout for at least several weeks.
Volatile Trade Desk Earnings Reports
Trade Desk is scheduled to report second quarter earnings Aug. 8. Investors may want to be cautious ahead of the report. One strategy around earnings would be to use call options.
That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
Trade Desk has been volatile when reporting financial results, diving in November 2023 and popping in February.
Analysts polled by FactSet estimate EPS of 36 cents, up 28%, with revenue climbing 24% to $578 million.
"We maintain a buy rating on TTD heading into Q2 earnings," said Truist Securities analyst Youssef Squali in a report. "We expect results to come in slightly ahead of management's guidance, fueled by continued strength in internet TV and in retail media as advertisers aggressively turn to data-driven, non-walled garden inventory consumption where TTD shines."
He added: "Trade Desk stands to benefit from being an independent, pure play demand-side platform (and the largest one in the open internet) that's free of the conflicts of many of its competitors and in a position to continue investing in longer-term initiatives."
Disney Upside, Amazon Risk?
Morgan Stanley analyst Matt Cost in a report said that over time more internet TV ads will be bought and sold programmatically vs. direct deals that make up 75% of the market today. He called Trade Desk "the only scaled, independent, and full-service demand-side platform in the internet TV market."
Shares in Trade Desk popped March 21 after Disney announced a new Real-Time Ad Exchange (DRAX) programmatic ad sales platform. Google parent Alphabet and Trade Desk were named as initial partners for the digital ad platform, which combines streaming ad inventory across Hulu and Disney+.
On the other hand, Amazon.com has been an overhang on Trade Desk stock. Amazon Prime has expanded its ad-supported video streaming, offering big brands an alternative to Trade Desk customers.
Trade Desk Stock Technical Ratings
Meanwhile, Trade Desk stock holds a Relative Strength Rating of 87 out of a best-possible 99.
Further, Trade Desk owns an IBD Composite Rating of 96, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
In addition, Trade Desk stock has an Accumulation/Distribution Rating of C-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on a scale of A+ to E, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
