The Trade Desk, Inc. (TTD): A Bull Case Theory

We came across a bullish thesis on The Trade Desk, Inc. (TTD) on Value Investing Subreddit Page by FckYouMoney. In this article, we will summarize the bulls’ thesis on TTD. The Trade Desk, Inc. (TTD)’s share was trading at $55.50 as of May 5^th. TTD’s trailing and forward P/E were 71.15 and 50 respectively according to Yahoo Finance.

The Trade Desk (TTD) is a leading independent demand-side platform (DSP) known for its strong capabilities in digital advertising, with a particular emphasis on connected TV, retail media, and cookieless identity solutions via its UID2.0 framework. Despite its solid position in the market, the stock has fallen over 60%, from approximately $140 in late 2024 to $53, primarily driven by weaker-than-expected forward guidance, delays in launching its AI-driven platform Kokai, and a broader market shift away from high-multiple tech stocks. However, the market’s reaction appears to be an overreaction.

The company remains highly profitable, with consistent revenue growth of over 20% annually and exceptional customer retention rates exceeding 95%. Additionally, it continues to generate strong free cash flow. The company is well-positioned to benefit from secular tailwinds in streaming and privacy-focused advertising technologies, which should support long-term demand for its platform. The market seems to be mispricing a temporary slowdown as a sign of structural decline, overlooking the company’s market leadership and long-term growth potential. Given its robust growth prospects and historical multiples, the stock appears to be undervalued, with a fair value of at least $100 in the short term, presenting a significant opportunity for investors willing to look past short-term volatility.

The Trade Desk, Inc. (TTD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held TTD at the end of the fourth quarter which was 42 in the previous quarter. While we acknowledge the risk and potential of TTD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TTD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.