The Trade Desk: Buy The Dip In TTD Stock At $45?

Core Viewpoint - The Trade Desk's stock has experienced a significant decline of 12.5% in the last five trading days due to Netflix's partnership with Amazon, which is expected to negatively impact The Trade Desk's financials and inventory exclusivity [2] Company Overview - The Trade Desk is a $22 billion company with $2.7 billion in revenue, currently trading at $45.54 [7] - The company offers a cloud-based platform for managing and optimizing data-driven digital advertising campaigns globally [5] Financial Performance - The Trade Desk's revenue growth over the past 12 months is 23.2%, with an operating margin of 17.7% [7] - The company has a Debt to Equity ratio of 0.02 and a Cash to Assets ratio of 0.28, indicating strong liquidity [7] - The current valuation metrics include a P/E multiple of 53.6 and a P/EBIT multiple of 47.0 [7] Stock Performance Analysis - Year-to-date, The Trade Desk's stock has declined over 60%, raising concerns about its valuation for potential investors [3] - The stock has historically underperformed relative to the S&P 500 during economic downturns, with a peak-to-trough decline of 64.3% from $111.64 on November 16, 2021, to $39.89 on November 9, 2022, compared to a 25.4% decline for the S&P 500 [8] - Despite past declines, the stock has shown resilience, fully rebounding to its pre-crisis peak by October 4, 2024, and reaching a high of $139.51 on December 4, 2024 [8] Historical Downturn Resilience - During the 2020 COVID-19 pandemic, The Trade Desk's stock fell 54.2% from $31.54 on February 19, 2020, to $14.44 on March 18, 2020, compared to a 33.9% decline for the S&P 500, but it fully recovered by May 7, 2020 [10] - In the 2018 correction, the stock decreased by 35.6% from $6.65 on October 13, 2017, to $4.28 on February 9, 2018, while the S&P 500 saw a 19.8% decline, with The Trade Desk recovering by May 11, 2018 [10]