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The analysts also raised the price target by 50% to $90 per share on the “best-in-class” Ad Tech stock. Shares of the digital content business rose over 5.5% Friday.
“We see 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.
“We believe 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,” they added.
The upgrade call is made despite the fact that TTD shares outperformed the S&P 500 by ~11% over the last ~6 months.
“We believe 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,” the analysts concluded.
The Trade Desk shares are up 63.4% year-to-date through Thursday’s close.
