Trade Desk Inc (NASDAQ:TTD) Issues Strong Guidance

By Swapna Meka February 16, 2024, 6:43 pm • Posted in Companies, Stocks

Trade Desk Inc (NASDAQ:TTD) stock rallies 19.68% (As on February 16, 12:01:55 AM UTC-4, Source: Google Finance) after the company issued strong first-quarter guidance and beat on revenue as a strong ad market drives demand for its digital advertising services. Net income rose 37% to $97 million, or 19 cents a share, from $71 million, or 14 cents, in the same quarter a year earlier. Customer retention remained over 95% during the year.

TTD in the fourth quarter of FY 23 has reported the adjusted earnings per share of 41 cents, missing the analysts’ estimates for the adjusted earnings per share of 43 cents expected by LSEG, formerly known as Refinitiv. The company had reported the adjusted revenue growth of 23 percent to $606 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $582 million. Adjusted EBITDA margin for the quarter stood at 47%, down from 50% in the year-ago period.

Additionally, the Company repurchased approximately $220 million of its Class A common stock in the fourth quarter of 2023. The Company repurchased approximately $647 million of its Class A common stock in the year ended December 31, 2023, at an average repurchase price of $63.87. As of December 31, 2023, the Company had $53 million available and authorized for repurchases.

The Trade Desk said first-quarter sales will be at least $478 million, topping analyst estimates of $452 million, according to LSEG.

The company said its board has approved an additional $647 million in share repurchases, bringing the total amount of future buybacks to $700 million. Repurchases totaled $220 million in the fourth quarter. The company also anticipates its adjusted EBITDA to be approximately $130 million.

Jefferies analysts saw TTD’s report as “impressive across the board.” The broker raised revenue estimates for the full fiscal 2024 and hiked the price target on the stock from $70 to $90.

“Based on better than expected results, the analyst are raising the FY24 rev est by 2% and now model 25% growth (vs. 23% in FY23),” analysts said in a note.

“We are also raising the FY24 EBITDA est. by 10% and now model a 41% margin (vs. 40% in FY23). In our view, the debate will now shift to TTD’s ability to deliver 25%+ rev growth in FY24, which we now believe is possible in a bull case scenario.”