The Trade Desk TTD shares have surged 77.1% over the trailing 12 months, outperforming the Zacks Computer and Technology sector’s appreciation of 28.9% and the Zacks Internet – Services industry’s return of 32.3%.

TTD’s acquisition of Sincera, a digital advertising data company that helps advertisers assess the quality of publisher data and optimize campaign investments, is expected to become a major driver.

By integrating Sincera’s tools, TTD’s platform will be able to provide advertisers with clearer insights and enable publishers to identify the data signals that maximize ad demand. This move has enhanced The Trade Desk’s ability to simplify and improve programmatic advertising on the open Internet.

One-Year Performance

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TTD has been benefiting from its innovative solutions portfolio, an expanding global footprint, advancements in omnichannel ad inventory and the growing adoption of programmatic advertising.

The Trade Desk recently launched Ventura, a cutting-edge streaming TV operating system designed to improve user experience and advertising efficiency. Its standout features include seamless cross-platform content discovery, personalized recommendations and simplified subscription management. TTD is collaborating with Smart TV original equipment manufacturers (OEM) and streaming TV aggregators to deploy Ventura.

However, TTD shares are currently overvalued, as suggested by its Value Score of F. In terms of the 12-month price/sales, the stock is trading at 20.36X, higher than the industry’s 6.09X and the broader sector’s 7.03X.

Price/Sales Ratio (F12M)

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Robust Partnerships and Client Base Bode Well for TTD

The Trade Desk’s extensive partnerships and growing client base have been key catalysts for its growth. Its network includes industry leaders like Disney DIS, NBCU, Walmart, Roku ROKU, LG, Fox, and Netflix.

Spotify Technology SPOT, via its extended partnership with TTD, is piloting integrations with OpenPath and UID2 through the Spotify Ad Exchange. The goal is to improve addressability and provide deeper insights into Spotify’s premium ad inventory.

On the international front, The Trade Desk maintains a robust partner network. Foodpanda, a leading food and grocery delivery platform in Asia, has partnered with TTD to optimize digital advertising in seven key markets, including Hong Kong, Malaysia, Pakistan and Singapore.

TTD has also been signing prominent clients, extending its footprint across varied sectors. Reach, a UK news publisher of 130 media brands, has adopted European Unified ID (EUID) to enhance ad experiences while also protecting journalism.

Global media company Motorsport Network has adopted EUID to offer relevant ads to its 60 million users, focusing on privacy and transparency. Cint has integrated UID2 for enhanced and omnichannel brand lift measurement.

Roku has adopted UID2 to enhance advertiser targeting precision and enable secure data collaboration through Roku Media.

TTD’s 2025 Earnings Estimates Remain Steady

The Zacks Consensus Estimate for TTD’s 2025 earnings is currently pegged at $2 per share, unchanged over the past 30 days. It indicates growth of 21.5% on a year-over-year basis.

The consensus mark for TTD’s 2025 revenues is pegged at $2.98 billion, indicating growth of 21.1%.

TTD beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 6.09%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

TTD Suffers Due to a Challenging Macroeconomic Condition

The Trade Desk is suffering as a result macroeconomic uncertainties. The intensely competitive nature of the digital advertising industry, dominated by industry giants such as Google and Amazon, continues to put pressure on TTD’s market positioning.

Growing regulatory scrutiny around data privacy and evolving consumer data practices also threaten to disrupt the established audience-targeting methods.

Furthermore, TTD’s reliance on partnerships with third-party platforms also exposes it to vulnerabilities from changes in these partners’ policies or technologies.

The Trade Desk’s strong portfolio and expanding partner base serve as key strengths. Its Growth Score of A indicates that investors who already own the stock might expect the company’s growth prospects to be rewarding over the longer term.

Nonetheless, macroeconomic challenges and competitive pressure are headwinds, while the company’s stretched valuation is also a concern.

The Trade Desk carries a Zacks Rank #3 (Hold), which implies investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Walt Disney Company (DIS) : Free Stock Analysis Report

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