Trade Desk Inc (NASDAQ:TTD) stock rose 0.82% (As on June 5, 11:41:58 AM UTC-4, Source: Google Finance) after Morgan Stanley analysts upgraded the company’s shares to Overweight from Equal Weight. The analysts also raised the price target by 50% to $90 per share on the “best-in-class” Ad Tech stock.

The analyst sees growth in ad-supported streaming and retail media as two of the strongest growth areas in online advertising and see the US CTV market growing at a ~18% ’22-’25 CAGR while we forecast retail media (global ex-China) to grow at a ~17% CAGR. As the leading independent demand-side platform (DSP), TTD is well positioned to benefit from both trends,” the analysts said in a client note. One of the key competitive advantages of The Trade Desk is the company’s “close relationship” with the ad agencies. The analyst believes TTD will be able [to] leverage its position as an independent player to sign more retail media partners…and ultimately be a leader in offsite retail media advertising. The upgrade call is made despite the fact that TTD shares outperformed the S&P 500 by ~11% over the last ~6 months. The analyst believes that with the ad markets stabilizing, there could be significant further upside as TTD reaccelerates growth. Given TTD’s competitive position as the leading independent DSP, as well as its low variable costs (<20% of revenue) and B2B business model, we look to SaaS as the main comp set (though we fully acknowledge TTD’s relative lack of contractual/recurring revenue streams.

Furthermore, Matthew Cost upgraded the California-based company this morning on “overweight” and raised his price objective to $90 that suggests a 20% upside from here. The analyst is constructive on the Trade Desk stock as he expects the multinational to benefit as ad spending continues to improve moving forward. The analyst believes Trade Desk will be able to leverage its position as an independent player to sign more retail media partners … and ultimately be a leader in offsite retail media advertising. Cost is convinced that the connected TV revenue will expand at about an 18% compound annual growth rate (2025) over the next few years.

Meanwhile, the company has delivered outstanding performance in the first quarter, once again outpacing the digital advertising market, growing revenue 21% year-over-year to $383 million. Further, Customer retention remained over 95% during the first quarter, as it has for the past nine consecutive years.