Trade Desk (NASDAQ:TTD) provides a self-service platform to help businesses manage their advertising campaigns. As the company explains, most of these ad buyers are ad agencies, brands or other tech-focused companies. The sheer size of Trade Desk’s addressable market, along with the company’s ambitious financial outlook, should convince investors to take a look at TTD stock.
Perhaps the thought of owning a stake in a digital ad platform provider never crossed your mind. Also, the general weakness in software stocks this year might have made you skittish about Trade Desk.
Yet, as we’ll discover, some impressive data points should motivate you to put Trade Desk stock on your watch list. As the company aggressively pursues a highly lucrative market, a swift share-price rebound could be in store sooner than you might expect.
What’s Happening With TTD Stock?
After the onset of Covid-19, the market placed a high premium on almost anything and everything digital. This included the digital advertising market, so it makes sense that TTD stock rallied in 2020 and 2021.
That rally might have been overdone, though. We’re talking about a run-up from $16 at the bottom to $114 at the top. It’s awfully difficult for a stock to maintain gains of that magnitude.
If you’re just discovering TTD stock now, your timing is fortunate as the shares are trading at a discount. Not long ago, they were 50% off compared to the $114 peak price. At the same time, Trade Desk’s total addressable market (global advertising) is racing toward $1 trillion, according to the company.
Currently, Trade Desk estimates that total global ad spending stands at around $750 billion. The company expects this market to expand as businesses seek ad-spend modalities that are digitized but also efficient and cost-effective.
As Trade Desk succinctly put it, “The pie is getting bigger while waste is being pushed out.” In this vein, Trade Desk’s self-service platform fits the bill perfectly, as it allows agencies to pick from more than 500 billion digital ad opportunities per day.
A Great Rate
All of this leaves open a crucial question, though. Within this vast market space, has Trade Desk been able to grow its revenue? The answer is definitely yes, and there’s hard data to prove it.
By delivering $315 million in first-quarter 2022 revenue, Trade Desk exhibited 43% growth in this area. Not only that, but Trade Desk’s non-GAAP adjusted EBITDA increased from $71 million in the year-earlier quarter to $121 million in Q1 2022.
Moreover, during the first quarter, Trade Desk’s customer retention remained over 95%. Amazingly, the company has maintained this customer retention rate for the past eight consecutive years.
What You Can Do Now
Trade Desk is ambitiously pursuing a fast-expanding addressable market that you might not have given much thought to until today. In light of the company’s notable revenue and EBITDA growth, investors should take a serious look at TTD stock while it’s still priced at a steep discount.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.