4. The Trade Desk, Inc. (NASDAQ:TTD)
Short Interest: 2.11%
Number of Hedge Fund Holders: 46
The Trade Desk (NASDAQ:TTD) offers its customers a self-service, cloud-based ad-buying platform where clients can plan, optimize, manage, and measure data-driven digital advertising campaigns. The company’s platform allows clients to undertake integrated campaigns across channels and ad formats, including television (CTV), audio, display, native and social, and digital-out-of-home, on a variety of devices. These may include mobile devices, computers, streaming devices, and television.
The Trade Desk’s (NASDAQ:TTD) platform also offers integrated access to a variety of data sources and omnichannel inventory, along with third-party services. Ad buyers collaborating with the company can use its platform’s integrations with publishers, inventory, and data partners for decision qualities and reach. Its enterprise application programming interfaces (APIs) also allow clients to expand and personalize platform functionality as per their preference. The Trade Desk (NASDAQ:TTD) typically collaborates with advertisers, advertising agencies, and other service providers working for advertisers or agencies.
The company delivered strong growth in Q2 2024, continuing its profitability trends. Revenue grew by 26% to $585 million, significantly surpassing the overall growth rate of the rest of the digital marketing industry. It is on a solid path of growth, success, and profitability, boosted by consistent 20%+ revenue growth year after year for the past several years. These trends make the company likely to outpace the market in the future, supported by significant growth areas such as connected TV.
The Trade Desk (NASDAQ:TTD) is helping advertisers think about efficacy from an out-of-the-box perspective, another reason behind its growing popularity. To help advertisers leverage the premium open Internet, the company has launched Kokai, its most ambitious platform since its inception. Kokai enables clients to employ data about their most loyal group of customers, using it as a starting point for attracting the next group of loyal customers. The platform guides clients in targeting these new customers across the thousands of destinations that make up the premium layer of the open Internet.
Kokai also employs AI to help customers understand the approximately 15 million ad opportunities that crop up every second and the several hundred variables associated with them. These processes can be streamlined according to a company’s particular business growth objectives, further solidifying Kokai’s efficiency. The platform’s early results have been encouraging, with the campaigns holding an incremental reach of more than 70% after moving to Kokai.
Performance metrics across the company have also improved by 25%, helping it unlock performance budgets for several years. This translates to more cost-efficient and precise clients. The company’s profitable business model gives it the flexibility to make investments, continuously driving growth and innovation in the long term. On September 13, Wedbush raised the stock’s price target to $115 from $110. Its current price target of $106.06 implies an upside of 8.43%. The Trade Desk (NASDAQ:TTD) ranks fourth on our list of the 8 worst adtech stocks to buy now.
