The Trade Desk - The Trade Desk operates as a leading independent demand-side platform (DSP) for media buyers, differentiating itself from competitors like Google and Meta by not owning media content [3] - The company has been recognized as a DSP technology leader, particularly in connected TV advertising, and utilizes AI to enhance its digital media buying process [4] - The Trade Desk has strong partnerships in retail advertising with companies like Albertsons, Dollar General, and Walmart, which provide unique measurement opportunities [5] - The stock is currently 49% below its record high, with a target price of $135 per share indicating a potential 90% upside from its current price of $71 [5] - Earnings are expected to grow at 12% annually through 2026, with a current valuation of 31 times earnings, which may be reasonable given past performance [6] - The company has a strong competitive position in a growing industry, making it a potential buy for patient investors [7] Upstart - Upstart provides an AI-driven lending platform that improves credit risk assessment compared to traditional models, analyzing thousands of signals to identify fraud and estimate default risk [8] - The platform allows lenders to approve more borrowers at lower interest rates, enhancing profitability and benefiting from a network effect as AI models improve over time [9] - Upstart's adjusted earnings are projected to grow at 195% annually through 2026, with a current valuation of 165 times earnings, which appears reasonable [11] - The stock is currently 86% below its record high, with a target price of $85 per share suggesting a 57% upside from its current price of $54 [5] - Long-term investors may find value in Upstart's compelling proposition for banks and credit unions, despite sensitivity to interest rate changes [10][12]

Company Overview - The Trade Desk has shown remarkable growth, returning over 2,300% since its IPO in 2016, despite a recent decline of over 40% from its all-time high [2][16] - The company operates in a competitive digital advertising market, providing a technology platform that allows advertisers to purchase ad space, target audiences, and track campaign results [6][7] Industry Dynamics - The digital advertising landscape is evolving, with advertising dollars shifting from traditional media to online platforms, driven by data utilization for targeted advertising [4][5] - Major players like Google and Facebook dominate the market, creating "walled gardens" that limit advertisers' control and data access [5] Growth Potential - The Trade Desk has generated $2.57 billion in revenue over the past four quarters, with a free cash flow conversion of $0.26 for every dollar [8] - Gross ad spending on The Trade Desk's platform is projected to reach approximately $12 billion in 2024, representing a small portion of a $135 billion digital media opportunity [8] - The company has experienced a 24% to 25% annual growth in gross ad spending from 2022 to 2024, indicating sustained growth momentum [9] Technological Advancements - The Trade Desk is transitioning to its new Kokai platform, which leverages artificial intelligence to optimize ad spending and improve campaign results, potentially leading to higher profit margins [11] Shareholder Management - The company has effectively managed stock-based compensation, limiting share dilution to just 3.4% over the past five years, which is crucial for maintaining shareholder value [12] Investment Opportunity - The recent stock sell-off presents a rare opportunity for investors, as the stock is currently valued at a level not seen in the past six years, despite its strong long-term track record [13][14] - The Trade Desk's leadership has outlined multiple strategies to capitalize on industry growth trends, reinforcing confidence in the company's future [14] - The current lower valuation suggests that revenue and earnings growth will likely be reflected in the stock's returns, positioning The Trade Desk as a potential long-term winner [16]

Core Viewpoint - The Trade Desk (TTD) has an average brokerage recommendation (ABR) of 1.62, indicating a general suggestion to buy, but reliance solely on this metric may not be advisable due to the inherent biases in brokerage recommendations [2][5][10]. Brokerage Recommendations - The ABR for TTD is calculated from 37 brokerage firms, with 24 recommendations classified as Strong Buy and 3 as Buy, representing 64.9% and 8.1% of total recommendations respectively [2]. - Brokerage analysts tend to exhibit a strong positive bias in their ratings, often issuing five Strong Buy recommendations for every Strong Sell [6][10]. Zacks Rank Comparison - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, with a strong correlation to near-term stock price movements, contrasting with the ABR which is based solely on brokerage recommendations [8][11]. - The Zacks Rank for TTD is currently 4 (Sell), indicating a negative outlook based on a 7.1% decline in the earnings consensus estimate to $1.77 over the past month [13][14]. Investment Implications - The disparity between the ABR suggesting a Buy and the Zacks Rank indicating a Sell highlights the need for investors to critically evaluate brokerage recommendations and consider additional metrics like Zacks Rank for informed decision-making [5][14].

Core Insights - The Trade Desk (TTD) shares have declined 47.2% over the past six months, indicating company-specific issues despite broader market recovery [1][8] - TTD has underperformed compared to its digital advertising peers, with Alphabet and Amazon shares down 4.1% and 8.4%, respectively, while Magnite gained 4.1% [2][8] - TTD is trading nearly 50% below its 52-week high, placing the stock in a distressed category [5] Market Conditions - Increasing macroeconomic uncertainty and trade tensions are expected to negatively impact TTD, potentially squeezing advertising budgets [6] - The competitive landscape in digital advertising is intense, dominated by major players like Alphabet and Amazon, which pressures TTD's market position [7][15] - Regulatory scrutiny around data privacy and changing consumer data practices pose additional risks to TTD's audience-targeting methods [7] Financial Performance - TTD's reliance on Connected TV (CTV) for revenue growth is concerning, as any adverse effects on this segment could significantly impact overall performance [8] - In Q1 2025, TTD derived 88% of its revenues from North America, indicating a limited international presence that restricts market expansion [9] - Total operating costs surged 21.4% year over year to $561.6 million, driven by investments in platform capabilities, which could pressure profit margins if revenue growth does not keep pace [11] Valuation Concerns - TTD's stock is considered expensive, with a forward 12-month Price/Sales ratio of 11.33X compared to the industry's 5.04X, indicating a stretched valuation [13] - Analysts have revised estimates downward over the past 60 days, reflecting bearish sentiment towards TTD's stock [12][15] - The combination of steep stock decline, high valuation, and reliance on a limited market segment suggests that investors may be better off selling TTD shares [15]

Shares of The Trade Desk (TTD -0.65%) were soaring last month as the ad tech leader delivered better-than-expected results in its first-quarter earnings report, redeeming itself after an earlier miss, and benefited from a broader risk-on movement in the market. That included a surge on May 12 when the U.S. and China agreed to lower tariff rates.As a result, The Trade Desk stock finished May up 40%, according to data from S&P Global Market Intelligence.As you can see from the chart below, the stock popped fo ...

Group 1: Market Overview - Recent stock market volatility due to U.S. trade policy uncertainty is beginning to stabilize, with leading technology companies showing strong business performance [1][2] Group 2: Nvidia - Nvidia reported a 69% year-over-year revenue increase in Q1 of fiscal year 2026, with a 12% rise from the previous quarter, driven by its leadership in AI data center chips [4][5] - Despite an anticipated $8 billion revenue loss from government restrictions on chip sales to China, Nvidia's Q2 guidance met Wall Street expectations, highlighting ongoing investments in AI infrastructure [5] - Analysts project Nvidia's earnings to grow by an average of 29% annually in the long term, justifying its current price-to-earnings (P/E) ratio of 48 [6] Group 3: The Trade Desk - The Trade Desk's stock rebounded after a poor Q4 last year, with Q1 2025 results exceeding analyst estimates, indicating strong performance in the growing digital advertising market [8][9] - The company has transitioned two-thirds of its customers to its new Kokai platform, which uses AI algorithms to optimize ad spending and campaign performance [9] - The stock's enterprise value-to-sales ratio decreased from 29 to 14, allowing investors to purchase shares at a significant discount [10] Group 4: Meta Platforms - Meta Platforms dominates the social media advertising landscape with 3.43 billion daily active users and generated over $10 billion in free cash flow in Q1 2025 [11] - The company is investing heavily in AI projects and aims to create a new consumer ecosystem featuring augmented reality headsets and smart glasses [12] - Analysts expect Meta's earnings to grow by an average of 18% annually in the long term, with a P/E ratio of about 25, presenting a potential bargain for investors [13]

Core Viewpoint - The Trade Desk's stock has declined 47% from its 52-week high, but the company's long-term outlook remains strong, particularly with its integration of AI technology in the advertising market [1][2]. Group 1: Company Performance - In Q1 2025, The Trade Desk reported revenue of $616 million, a 25% year-over-year increase, surpassing Wall Street's estimate of $574 million [8]. - The adjusted earnings per share (EPS) for the same quarter was $0.33, which is 27% higher than the previous year, also exceeding expectations [8]. - For 2025, analysts project a 17% revenue increase and a 6% rise in EPS, with even stronger growth anticipated in 2026 [10][12]. Group 2: Market Position and Strategy - The Trade Desk is leveraging its AI-driven Kokai ecosystem to process over 13 million impressions per second, allowing for optimized ad spending based on real-time consumer behavior [5]. - The company is expanding into new verticals, including retail media, while maintaining a strong position in the high-growth connected TV (CTV) market [6]. - The integration of AI technology is expected to enhance advertising performance metrics, positioning The Trade Desk as a leader in innovative advertising solutions [9]. Group 3: Valuation and Investment Opportunity - The stock's valuation has adjusted to a forward price-to-earnings (P/E) ratio of 42 times its consensus 2025 EPS, significantly lower than the nearly 200 average in 2024 [13]. - The valuation is projected to improve further into 2026, with a one-year forward P/E ratio expected to drop to 35 [13]. - The company's solid balance sheet, with $1.7 billion in cash and no financial debt, supports its growth potential and positions it favorably for investors [11].

Core Insights - The article discusses the potential recovery of The Trade Desk (NASDAQ: TTD) after initial challenges with its new platform, Kokai, which affected customer confidence and led to disappointing results in Q4/24 [2]. Group 1: Company Overview - The Trade Desk is highlighted as a company with a defensible competitive advantage and significant operational leverage potential [1]. - The service SHU Growth Portfolio focuses on small, high-growth potential stocks, including The Trade Desk, and employs a buy and hold strategy with tranche purchases [2]. Group 2: Market Strategy - The SHU Growth Portfolio offers a comprehensive approach, including an illustrative portfolio, buy alerts, and market updates, aimed at identifying stocks with multi-bagger potential while managing risks [2]. - The article emphasizes the importance of real-time buy and sell signals and active community engagement for trading opportunities [1].

Financial Data and Key Metrics Changes - The Trade Desk held its Annual Meeting of Stockholders on May 27, 2025, where preliminary results indicated that stockholders voted in favor of key proposals, including the 2025 Incentive Award Plan and the compensation of named executive officers [7]. Business Line Data and Key Metrics Changes - No specific data regarding individual business lines was provided during the meeting [10]. Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting [10]. Company Strategy and Development Direction and Industry Competition - The meeting included the approval of the 2025 Incentive Award Plan, which is an amendment and restatement of the 2016 Incentive Award Plan, indicating a focus on incentivizing performance and aligning executive compensation with company goals [5]. Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [10]. Other Important Information - The meeting was conducted in compliance with company bylaws and Nevada law, and a quorum was confirmed [3][4]. Q&A Session Summary Question: Were there any questions submitted during the meeting? - There were no questions in the queue during the Q&A session, leading to the conclusion of the Annual Meeting [10].

Industry Overview - The digital advertising market is expected to grow at a compound annual growth rate (CAGR) of 15.4% from 2025 to 2030, driven by mobile penetration, social media proliferation, and programmatic advertising expansion [2] - Video advertising is projected to remain the dominant format as brands increasingly leverage visual storytelling [2] The Trade Desk (TTD) - TTD reported revenues of $616 million in Q1 2025, a 25% year-over-year increase, exceeding management's guidance of at least $575 million [4] - Adjusted EBITDA for TTD was $208 million, reflecting a 34% margin compared to $162 million and a 33% margin in the previous year [4] - Customer retention rate was over 95% for the reported quarter [4] - TTD's net cash from operating activities was $291.4 million, with free cash flow at $230 million [5] - Adjusted earnings per share increased by 27% year-over-year to 33 cents [5] - The Kokai platform is utilized by two-thirds of clients, achieving lower cost per conversion by 24% and lower cost per acquisition by 20% [5] - TTD's revenue is heavily reliant on North America, with 88% of revenues coming from this region, limiting international market expansion [7] - Total operating costs surged by 21.4% year-over-year to $561.6 million, which may impact profitability if revenue growth does not keep pace [8] Criteo (CRTO) - Criteo's AI-driven Performance Media business and capabilities in Retail Media are strong growth drivers [9] - The Commerce Media Platform includes both demand-side and supply-side solutions, allowing Criteo to capture value across the ad tech value chain [9] - Criteo's media spend was $4.3 billion over the last 12 months, with $919 million in Q1 2025 [10] - Retail Media on-platform revenues grew by 17% year-over-year, supported by partnerships with 70% of the top 30 U.S. retailers [10] - Criteo onboarded 300 new brands in Q1, bringing the total to over 3,800 for Retail Media [11] - The company launched a new AI-powered automation toolset, Commerce GO!, designed to streamline campaign launches [12] - Criteo differentiates itself by offering direct retailer access and a transparent platform built around first-party data [13] Share Performance and Valuation - Year-to-date, CRTO has declined by 33.6%, while TTD has seen a decline of 37.1% amid macroeconomic uncertainties [14] - Valuation metrics indicate TTD is overvalued with a Value Score of F, while CRTO has a Value Score of A [16] - TTD's forward 12-month price/earnings ratio is 38.32X, significantly higher than CRTO's 5.97X [17] Analyst Estimates - Analysts have revised CRTO's earnings estimates downward for the current quarter, indicating a trend of negative revisions [18] - TTD has experienced relatively lower downward revisions in earnings estimates compared to CRTO [20] Investment Recommendation - Criteo is positioned as the stronger investment option due to its better valuation, focus on partnerships, and expanding retail media presence [22]