Key Points August's 37% plunge after a disappointing earnings report set a weak tone heading into September. Amazon announced it is partnering with Netflix to help marketers buy ads on the streaming service -- a move that could undercut The Trade Desk and potentially take market share. In light of intensifying competition, the stock's high valuation is questionable. 10 stocks we like better than The Trade Desk › Shares of The Trade Desk (NASDAQ: TTD) fell a total of 10.3% in September, according ...

Core Insights - The Trade Desk, Inc. (TTD) and Magnite, Inc. (MGNI) are prominent players in the digital advertising technology market, with TTD focusing on demand-side platforms and Magnite on supply-side platforms [1][10] Digital Advertising Market Overview - The global digital advertising market is projected to grow at a CAGR of 15.4% from 2025 to 2030, with video advertising leading the way due to its effectiveness in visual storytelling [2] Company Performance and Strategies The Trade Desk (TTD) - TTD's growth in Q2 2025 was significantly driven by connected TV (CTV) and retail media, with video accounting for a high-40s percentage of its overall business [4] - The Kokai platform upgrade has seen over 70% client adoption, with advertisers using Kokai increasing their spend by over 20% faster than those not using it [5] - TTD expects Q3 revenues of at least $717 million, reflecting a 14% year-over-year growth, with adjusted EBITDA around $277 million [6] - TTD's operating costs rose 17.8% year-over-year to $577.3 million, raising concerns about profitability if revenue growth does not keep pace [8] Magnite (MGNI) - MGNI's CTV contributions increased 14% year-over-year in Q2 2025, representing 44% of its contribution mix, bolstered by partnerships with major platforms [10] - The acquisition of streamr.ai aims to enhance CTV advertising accessibility for small and medium-sized businesses [10] - MGNI's DV+ business is experiencing momentum, with an 8% increase in contribution ex-TAC from the last reported quarter [13] - New generative AI tools are expected to drive operational efficiencies and new monetization opportunities for MGNI [14] Share Performance - Over the past three months, MGNI shares increased by 13.2%, while TTD shares fell by 32.9% [9][15] Valuation and Analyst Estimates - Both TTD and MGNI are considered overvalued, with TTD trading at a forward P/E ratio of 23.11X and MGNI at 21.99X [17][18] - Analysts have made marginal downward revisions for TTD's bottom line, while MGNI has seen an upward revision of 7.32% for the current fiscal year [19][22] Investment Outlook - MGNI holds a Zacks Rank 2 (Buy), indicating a stronger investment pick compared to TTD, which has a Zacks Rank 3 (Hold) [23]

Core Viewpoint - The Trade Desk's premium valuation is increasingly difficult to justify due to competitive pressures and slowing growth [2][3][11]. Financial Performance - In Q2 2025, The Trade Desk reported a revenue increase of 19% year-over-year to $694 million, with adjusted EBITDA of approximately $271 million, reflecting a 39% margin [5]. - The first quarter of 2025 saw a revenue increase of 25% to $616 million, while full-year 2024 revenue grew by 26% [7]. - For Q3 2025, management guided revenue of at least $717 million, implying a 14% year-over-year growth [7]. Growth Dynamics - Connected TV (CTV) remains the fastest-growing channel for The Trade Desk, with no signs of slowing down [6]. - However, growth is decelerating, with a drop from 25% in Q1 to 19% in Q2, and guidance suggesting mid-teens growth for the upcoming quarter [7][11]. Competitive Landscape - Netflix's announcement to allow programmatic ad purchases through Amazon's DSP poses significant competitive risks for The Trade Desk [2][9]. - The entry of Amazon into the programmatic advertising space could pressure The Trade Desk's pricing power and market share, as large buyers may prefer Amazon's tools [10]. - The Trade Desk remains the leading independent DSP, with a customer retention rate above 95% and a strong product roadmap [11]. Valuation Concerns - The stock trades at a price-to-earnings multiple in the high 50s, which assumes sustained growth and market share gains without significant pressure from larger platforms [11]. - A more appropriate price-to-earnings ratio in the 30s may better reflect the competitive and execution risks associated with connected TV [12].

Summary of Magnite (MGNI) 2025 Conference Call Company Overview - **Company**: Magnite (MGNI) - **Industry**: Digital Advertising, specifically focusing on Supply-Side Platform (SSP) and Connected TV (CTV) advertising Key Points and Arguments Evolution of Business Model - Magnite has transitioned from a traditional SSP platform to a more comprehensive solution, focusing on streaming opportunities and CTV [4][5] - The company has made strategic acquisitions (Telaria, SpotX, SpringServe) to enhance its capabilities in the streaming space [4] Client Segmentation and Growth - There is significant overlap between CTV and DV+ clients, with major players like Disney and Paramount utilizing both services [7][8] - The company has positioned itself as a preferred programmatic partner for top streaming services, which has driven growth [11] Growth Drivers - Account wins and partnerships with major streaming platforms are key growth drivers [11] - The expansion of programmatic advertising and the entry of small to medium-sized businesses into the market are expected to increase demand [12] - International expansion is also a focus, with a current mix of 75% U.S. and 25% international, but international growth is outpacing U.S. growth [14] Partnerships with Major Players - Relationships with Netflix and Amazon are highlighted as significant, with Netflix potentially becoming one of Magnite's largest clients [24][28] - Amazon is not only a publisher but also a demand-side platform (DSP), and their partnership is multifaceted, involving both CTV and inventory monetization [29][30] Agency Partnerships - Agencies are increasingly building their own exchanges and leveraging Magnite's technology to curate better deals for clients [37][39] - This shift is seen as a way for agencies to regain control over media planning and pricing [36] Competitive Landscape - The company views the ongoing legal challenges faced by Google as a potential opportunity for market share gain, with a significant disparity in market share (60% for Google vs. 6% for Magnite) [45][46] - Any shift in market share could result in substantial revenue increases for Magnite [47] Impact of GenAI and Search Engines - The rise of GenAI and changes in search engine behavior are expected to impact traffic to publishers, but Magnite believes its diverse portfolio will mitigate risks [54][56] - The company is developing AI tools to enhance audience targeting and efficiency in ad buying [58] M&A Strategy - Future M&A activities will focus on enhancing product offerings without increasing debt, leveraging cash flow for acquisitions [63][64] Financial Outlook - Magnite is positioned as a highly leveraged business, with expectations of margin expansion as ad spend increases without proportional increases in costs [65][66] Additional Important Insights - The company is optimistic about its ability to adapt to changes in the advertising landscape, including the potential for new revenue streams from search engines [55] - The focus on building a robust technology infrastructure and partnerships is seen as critical for future growth [18][19] This summary encapsulates the key insights from the conference call, highlighting Magnite's strategic direction, growth opportunities, and competitive positioning in the digital advertising industry.

Core Insights - The Trade Desk launched Kokai in 2023, a next-generation platform that integrates advanced AI, measurement, partner integrations, and user experience for programmatic advertising [1] - Kokai has shown significant performance improvements, with clients like Samsung and Cash Rewards reporting increases in campaign effectiveness [2][11] - The adoption of Kokai is accelerating, with three-quarters of clients using it and full adoption expected by the end of 2025 [3][11] Performance Metrics - Samsung achieved a 43% increase in reaching its target audience for an omnichannel campaign in Europe, while Cash Rewards saw a 73% improvement in cost-per-acquisition for campaigns in Asia [2] - Campaigns on Kokai are showing over a 20-point increase across key performance indicators [2][11] - Clients shifting their spend to Kokai are increasing overall investment in The Trade Desk by more than 20% faster than others [3] Revenue and Growth Projections - The Trade Desk reported a 19% year-over-year revenue growth, driven by Kokai and strength in connected TV [5] - The company forecasts a 14% revenue increase for the third quarter, projecting at least $717 million in revenue [5] Competitive Landscape - Taboola.com Inc. is expanding its performance advertising platform, targeting a $55 billion market with its new offering, Realize [6][7] - Magnite operates as a leading supply-side platform, with significant growth driven by its partnerships and ad server technology [8][9] Valuation and Market Performance - The Trade Desk's shares have declined 49.3% over the past year, contrasting with the S&P 500's rise of 15.2% [12] - The company trades at a forward price-to-sales ratio of 8.02X, higher than the industry average of 5.38X [13]

Core Viewpoint - The Trade Desk is positioned to benefit from three significant megatrends in digital advertising, despite facing short-term challenges such as slower growth and increased competition [1] Group 1: Connected TV (CTV) - The U.S. connected TV ad spend is projected to grow from $30 billion in 2024 to nearly $40 billion by 2027, with a global market expected to expand from $268 billion in 2024 to $531 billion by 2030, indicating a substantial opportunity for The Trade Desk [3][4] - The Trade Desk operates as an independent demand-side platform, providing advertisers access to premium streaming inventory across various publishers, which positions it favorably against competitors like YouTube and Facebook [3][4] - The company’s partnerships with major streaming services such as Disney+ and Netflix, along with its Unified ID 2.0 initiative, enhance its competitive edge in the CTV space [3] Group 2: Retail Media - Retail media is emerging as a new advertising frontier, allowing brands to place ads directly on retailer websites and apps, which is more effective due to the use of first-party purchase data [5][6] - The global retail media market is expected to reach $177 billion by 2025, indicating rapid growth in this advertising channel [6] - The Trade Desk has established itself in this sector by powering retailer ad networks outside of Amazon, exemplified by its partnership with Walmart Connect [7][8] Group 3: International Expansion - The Trade Desk currently generates most of its revenue in the U.S., but the international advertising market presents a significant growth opportunity, with global digital ad spend projected to reach $1.1 trillion by 2025 [9][10] - Only 12% of The Trade Desk's revenue comes from international markets, highlighting the potential for substantial growth if the company can replicate its U.S. success abroad [9][10] - Capturing even a small share of the global ad spend outside the U.S. could result in tens of billions in additional revenue capacity for The Trade Desk [10] Group 4: Long-term Growth Potential - Despite current challenges, The Trade Desk is at the center of three rapidly growing areas in digital advertising: CTV, retail media, and international expansion, which are expected to drive long-term growth [12] - These markets collectively represent several hundred billion dollars of addressable spend in the coming years, positioning The Trade Desk as a leading independent DSP [12][13] - The company does not need to dominate every segment but must remain a trusted alternative to larger competitors, which is crucial for patient investors [13]

Company Announcement - MediaAlpha, Inc. will release its second quarter 2025 financial results on August 6, 2025, after market close [1] - A Q&A conference call will be held on the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the results [1] Webcast and Participation - A live webcast of the conference call will be available on MediaAlpha's Investor Relations website [2] - Participants can also join the call by dialing toll-free numbers, with a specific conference ID provided [2] - An audio replay of the conference call will be accessible after the event [2] Company Overview - MediaAlpha is recognized as a leading programmatic customer acquisition platform in the insurance industry [3] - The company has over 1,200 active partners and generated nearly 119 million Consumer Referrals in 2024 [3] - MediaAlpha's programmatic advertising technology facilitated $1.5 billion in spending for 2024 across various insurance sectors [3]

Core Insights - The Trade Desk's stock surged 14% after being included in the S&P 500, indicating strong market recognition and potential for institutional investment [2] - The company has demonstrated impressive revenue growth, with a 25.8% average growth rate over three years, significantly outpacing the S&P 500's 5.5% [3] - Profitability metrics show The Trade Desk's operating margin at 17.6% and net margin at 16.0%, both exceeding the S&P 500 averages [4] - The balance sheet reflects strong financial health, with a debt-to-equity ratio of 0.9% and cash reserves of $1.7 billion [5] - Valuation analysis reveals The Trade Desk is trading at high premiums, with a price-to-earnings ratio of 92.3 compared to the S&P 500's 26.9 [7] - The company has shown vulnerability to market volatility, with significant stock price declines during economic downturns, yet has demonstrated strong recovery potential [8] - Competitive pressures and regulatory challenges in the programmatic advertising market could impact future growth [9][10] - The Trade Desk is positioned as an attractive investment opportunity due to its robust fundamentals and S&P 500 inclusion, but high valuation premiums necessitate careful risk assessment [11][12]

Core Insights - Magnite and Paramount Australia have announced a partnership to provide programmatic access to Paramount+'s premium streaming TV inventory in Australia for the first time [1][3] - This collaboration aims to enhance advertising efficiency and transparency, allowing advertisers to reach engaged streaming audiences more effectively [1][3] - The partnership is part of Paramount Australia's ongoing business and technology transformation, leading to the development of Paramount Connect [1] Company Overview - Magnite is the largest independent sell-side advertising company globally, facilitating monetization of content across various formats including CTV, online video, display, and audio [4] - Paramount Australia is a prominent media and entertainment company, known for creating premium content and experiences, with a portfolio that includes Network 10, Paramount+, Paramount Pictures, Nickelodeon, and MTV [5] Technological Integration - The integration of Magnite's SpringServe video platform with Paramount's mediation capabilities will streamline advertiser access to Paramount's premium streaming inventory [2] - The partnership is expected to drive innovation in streaming TV, providing brands with a first-mover advantage in accessing one of Australia's leading streaming platforms [3]

Core Insights - Assembly Control is a customized platform developed in partnership with a leading ad verification and measurement platform, aimed at enhancing programmatic advertising for clients [1] - The platform addresses inherent risks in programmatic advertising, such as ad misplacement and fraud, while improving campaign performance and accountability [2][3] Company Overview - Assembly is a global omnichannel media agency that integrates data, talent, and technology to drive growth for top brands, supported by a proprietary operating system called STAGE [4] - The agency employs a global team of 2,300 experts across 35 offices, focusing on impactful work and redefining marketing as part of the Stagwell network [4] Programmatic Advertising Insights - Programmatic advertising accounts for over 90% of US digital display ad spend, highlighting its significance and complexity in the digital media landscape [2] - The agency aims for a 75% client adoption rate of Assembly Control globally by the end of 2025, indicating a strong commitment to programmatic leadership [3] Key Features of Assembly Control - The platform offers improved campaign outcomes through strategic inventory selection and reduces brand safety risks across various publishers and environments [5] - It includes tiered controls based on advertisers' safety and suitability approaches, along with a proprietary inclusion list of compliant publishers and sellers [5]