Revenues rose nearly 50% year-over-year. EBITDA margins expanded nearly 10 points year-over-year. EBITDA dollars increased by more than 80%.
Those are great numbers, so it’s no wonder that TTD stock is rallying after the print.
Zooming out, these great numbers broadly underscore one thing: TTD stock is a great long-term investment. There are three big tailwinds at play here:
- The shift toward connected TV consumption and advertising.
- The emergence of data-driven advertising.
- A big pivot towards the “Open Internet.”
None of these tailwinds will slowdown anytime soon. If anything, they’ll only gain momentum in the 2020s. As they do, The Trade Desk will turn into the most important ad tech company in the world — and TTD will stay on a big-time uptrend.
Here’s a deeper look.
Shift Toward CTV Advertising
For years, there has been a steady trickle of consumers out of the linear TV channel and into the connected TV channel, as consumers have increasingly favored CTV’s on-demand functionality.
This trickle turned into a downpour during the Covid-19 pandemic. This downpour will continue for the foreseeable future. It won’t stop until about 2030, when the entire world has cut the cord and everyone is consuming media through internet-based channels.
That’s important for The Trade Desk, because ad dollars follow eyeballs. There are about $160 billion sitting in linear TV ad budgets that are waiting to chase eyeballs into the CTV channel. Inevitably, they’ll do just that. By 2030, CTV ad spending will measure north of $160 billion, versus about $10 billion today.
The Trade Desk is equipped with the market’s best data-driven, demand-side-platform for CTV advertising. As such, a lot of those ad dollars will be allocated by The Trade Desk’s algorithms.
Thus, the company sits at the epicenter of an enormous CTV advertising market that will grow by 16X over the next decade. That, of course, positions TTD stock for continued big gains.
Emergence of Data-Driven Advertising
Also for years — decades, even — advertisers have been married to a 1950s-esque model wherein marketing campaigns were driven by humans, transacted by humans, and determined by humans.
That’s a “dumb” way of doing things. Over the past few years, a “smarter” way has emerged wherein the entire process is driven by data and performed by high-speed algorithms.
This new way of advertising — dubbed data-driven advertising, or programmatic advertising — is the future. It’s smarter. It’s better. And it’s faster. Ultimately, it gives marketers a far better chance of getting their ads in front of the right audience at the right time.
Data-driven advertising really gained momentum during the Covid-19 pandemic. That’s because marketers had to do a lot with a little. Ad budgets were cut. They needed to squeeze all the value out of those downsized budgets that they could. The best way to do that? Use data. Use algorithms.
So they turned to The Trade Desk, who operates the world’s most advanced and robust data-driven ad tech platform.
This trend is still in its infancy. Ultimately, ad spending is marching towards $1 trillion annually. All trillion dollars will be transacted programmatically. Gross spend on The Trade Desk’s platform measured just over $4 billion in 2020.
The runway here is enormous. That’s a big positive for TTD stock.
Big Pivot to the Open Internet
The third and final big tailwind underpinning TTD stock is the big pivot towards the “Open Internet.”
Traditionally, the internet has been ruled by a few enormous media platforms. Facebook (NASDAQ:FB). Alphabet (NADSAQ:GOOG). Amazon (NASDAQ:AMZN). These tech giants have constructed walled gardens around their digital media empires, so that no one has access to the vast amounts of data they use to run data-driven ad campaigns for marketers.
But consumers have increasingly shifted toward engaging with media platforms not in those walled gardens. As they have, The Trade Desk — in unison with other ad tech companies — have constructed transparency databases that enable effective data-driven advertising on platforms outside of Facebook, Alphabet, and Amazon.
This big trend will continue for the foreseeable future. As it does, The Trade Desk will morph into the technological backbone of increasingly effective and popular data-driven advertising on the Open Internet.
Bottom Line on TTD Stock
The Trade Desk had a blockbuster fourth-quarter earnings report which strongly implied that TTD stock is one of the best growth stocks to buy for the next decade.
But it’s not the best growth stock to buy today.
Instead, the best growth stock to buy today is a company that reminds me of a young Amazon (NASDAQ:AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
Click here to find out.
P.S. If you’ve been following my work, you know I’m extremely bullish on innovation. And right now, we have rarely seen such opportune moments throughout history to invest in innovation.
While I have many stocks on my watch list that excite me, there’s one stock in particular that I’m absolutely giddy about. And I’ll be giving this stock pick away – for FREE – at my first-ever Exponential Growth Summit on Feb. 23, at 4 p.m. EST.
In anticipation of this event, I’ve included my free primer explaining exactly why I’m so excited about this stock – click here now to register and get your free report sent directly to your inbox.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.