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Earnings Preview for Trade Desk (TTD)

by | Aug 5, 2021

Trade Desk (TTD) reporting earnings on Monday before the open with the Street looking for $0.13 on $262.82M in sales. Next quarter is guided to $0.12/$275.29M and the FY is $0.62/$1.14B, a 36% increase Y/Y. TTD shares have closed higher in four of the last six with an average closing move of 14.25% and a max move of 26.58%. The current implied move is 8.87%. Options flow has been bullish with sellers in the October $77.50 puts on 8/4 while the October $77.50 calls have 3000X in open interest from buyers. A massive buy of 40,000 October $75 calls from 7/7 remains in OI as well, a $43.6M position. Shares are coiled near new highs in a small flag above its 8-EMA. A run back at $92.50 has significant upside with a measured move from the recent lows up around $135-$140. The $42.2B company trades 32.7X EV/sales with 27% growth. TTD should continue to see strong results given the recent positive commentary on advertising spending, especially around streaming. The company recently launched Solimar, their new trading platform that will help marketers optimize their digital advertising campaigns across the open internet. The move will help more brands push forward campaigns based on specific KPIs instead of relying on clicks and CPMs. TTD’s current launch is also critical ahead of October’s big ad-buying push by brands into the Holidays. Analysts have an average target for shares of $79.50 with a Street High $101. Stephens positive into the report on 8-2. They noted positive read-throughs from peers and “encouraged by the fact that each participant exhibited accelerating two-year growth in 2Q21 vs. 1Q21 and to highlight the surge in advertising demand that took place in 2Q.” They upgraded shares to Overweight in July given their dominant positioning as the independent demand side platform of choice which makes the stock a compelling pick. Evercore raising estimate on 7/8 citing their increased confidence in the long term potential of Solimar, its just-unveiled new media trading platform, as well as their ability to successfully scale and deliver on its alternative identity products by 2023. Short interest is 3.3%. Hedge fund ownership fell 10% in Q1. Alkeon Capital a big buyer of calls.

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