The Trade Desk: spectacular growth with good fundamentals

The Trade Desk (TTD) is a digital advertising company, has developed a software platform used by digital ad buyers to purchase data-driven digital advertising campaigns across various ad formats and devices.

The company is based on California and was listed on the NASDAQ since October 2016.

In December it was in the top 5 of our Uncommon IPO Index, despite having fallen 13.9% on December 2 . In these first two weeks of January, the share is up 10.5%:

+10,5% up

If we ampliate the focus we can see the structure of the price looks good and is consistence:

If we expand the focus we see that the price structure is good and the price increase is consistent:

x6

The share price has multiplied by 6 in just two years.

Apparently this rise does not respond to a specific event. Let’s look at the main financial data.

2016201720182019
Revenues (Mill)200310480610
Profit (Mill)-305090100
Free Cash Flow (Mill)2060100
ROA-7,15%7,61%9,21%8,46%
ROE-29,94%24,78%27,54%22,19%
ROIC-19,96%22,57%27,45%15,62%

The evolution of the main key financial data is very good, although the last year has deteriorated slightly (they have only stopped improving). The company is experiencing great growth, accompanied by generation of shareholder value. The latter is something very difficult to achieve (spectacular growth + generation of shareholder value) and The Trade Desk has achieved it: ROIC, ROE and ROA two-digit FCF growing.

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