The Trade Desk vs. PubMatic: Which Ad-Tech Stock Is the Better Pick?
Both The Trade Desk TTD and PubMatic PUBM play pivotal roles in the programmatic advertising ecosystem, but at opposite ends of the spectrum. TTD operates a leading demand-side platform (DSP), which helps advertisers focus on data-driven ads. PubMatic, on the other hand, is a sell-side platform (SSP) that helps publishers across the open internet to control access to their inventory and boost monetization.
Since both firms having massive exposure to the booming CTV and retail media trends, this makes for an intriguing comparison for investors.
So, which stock makes a better investment pick at present? Let's deep dive into the pros and cons for each company.
TTD is confident in its ability to outpace the market and seize future opportunities owing to solid execution across key initiatives — connected TV (CTV), retail media, international expansion, Kokai, UID2 and OpenPath. The acquisition of Sincera, a leading digital advertising data company, will aid in enhancing its programmatic advertising platform by integrating Sincera's actionable insights on data quality. It recently unveiled the OpenSincera application to offer Sincera's rich advertising metadata to the ad tech ecosystem.
The company's Kokai platform is being used by two-thirds of the clients, much ahead of schedule. The platform is delivering on lower funnel KPIs, including 24% lower cost per conversion and 20% lower cost per acquisition, per TTD. 100% adoption by clients is expected to be completed by this year's end. The integration of Koa AI tools was highlighted by management as a 'game changer' for the Kokai platform. It recently introduced Deal Desk, an innovation within its Kokai platform designed to enhance how advertisers and publishers manage one-to-one deals and upfront commitments.
First-quarter revenues of $616 million jumped 25% year over year and surpassed management's guidance of at least $575 million. Adjusted EBITDA was $208 million (34% margin) compared with $162 million (33% margin) in the year-ago quarter. Video, which includes connected TV or CTV, represented a high 40 percent share of digital spend, while mobile had a mid-30 percent share. Display constituted a low double-digit share, and audio represented around 5%. Customer retention was over 95% for the quarter reported.
Nonetheless, increasing macroeconomic uncertainty and escalating trade tensions do not augur well for TTD, as these could squeeze ad budgets. TTD highlighted the impact of the volatile macro backdrop, particularly on the large global brands. If macro headwinds worsen or persist into the second half of 2025, revenue growth may face further pressure due to reduced programmatic demand. The intensely competitive nature of the digital advertising industry, dominated by industry giants like Alphabet and Amazon, continues to put pressure on TTD's market position.
While CTV remains a strong revenue driver, the market is increasingly fragmented and competitive. Heavy reliance on CTV for growth is a concern, as any adverse impact on this segment could weigh heavily on the company's overall performance. Moreover, TTD derived 88% of its revenues from North America, while only 12% came from international markets. A weak international footprint limits TTD's total addressable market expansion potential.
Excluding the drag from a large DSP client and political ad revenues, PubMatic's underlying business grew 21% year over year in the first quarter of 2025. The strong momentum is being driven by secular tailwinds in CTV, SPO (Supply Path Optimization) and emerging revenue streams. Importantly, these growth drivers now comprise 70% of total revenues, signaling a diversified business that is less dependent on legacy display advertising.
Like TTD, PUBM is gaining from growth in the CTV business, which bolsters its strategic positioning in the high-growth programmatic video. PUBM is expected to gain from the continuing shift of ad dollars from linear TV to streaming, especially in a market favoring programmatic spot buys with flexibility over heavy upfront commitments. PubMatic has already secured over 80% penetration among the top 30 streamers.
In the last reported quarter, CTV revenues surged over 50% year over year, while omni-channel video revenues grew 20% and represented 40% of total revenues. PubMatic is also heavily investing in Activate for SPO, Convert for commerce media, and Connect for curation to drive growth and create sticky customer engagement. Strategic partnerships like Spectrum Reach and TCL in live sports augur well.
PubMatic is embedding AI across its portfolio to enhance both efficiency and outcomes. It has launched a GenAI-powered end-to-end platform that offers buyers direct access to the open internet almost entirely. This technology aids in optimizing the entire stage of the media buying process, including inventory discovery and performance optimization. PubMatic is scaling across international markets. The company is witnessing strong performance in India, Europe, Australia and Japan. The recent expansion of its collaboration with BBC and other traditional broadcasters indicates growing recognition of PUBM's platform for streaming monetization.
Given these factors, PUBM forecasts $66-$70 million in revenues, assuming over 15% year-over-year growth of the underlying business. The competitive landscape and the ongoing macro uncertainty and cautious advertiser behavior are concerning. One of PubMatic's major DSP clients also revised the bidding approach, affecting PUBM's top line. In the last reported quarter, revenues declined 4% year over year despite strength in the underlying business.
Year to date, PUBM and TTD have lost 24.7% and 41.6%, respectively, amid macroeconomic uncertainties and effects of tariffs and inflation surrounding the industry.
Image Source: Zacks Investment Research
Valuation-wise, TTD is overvalued, as suggested by the Value Score of F, while PUBM has a Value Score of B.
Image Source: Zacks Investment Research
In terms of the forward 12-month price/earnings ratio, TTD shares are trading at 10.87X, higher than PUBM's 1.74X.
Analysts have made significant downward revisions for PUBM's bottom line.
Image Source: Zacks Investment Research
For TTD, there is a relatively lower downward revision.
Image Source: Zacks Investment Research
TTD and PUBM currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Trade Desk, driven by its leading DSP position, rapid innovation through platforms like Kokai and OpenPath, and strong execution in high-growth areas like CTV and retail media, emerges as a stronger investment case. While PubMatic shows potential, significant downward estimate revision and declining revenues keep us on the sidelines.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Trade Desk (TTD) : Free Stock Analysis Report
PubMatic, Inc. (PUBM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Bank of America Stock (BAC) Nears Record High as Pivotal Earnings Report Looms
Bank of America (BAC) is scheduled to report its Q2 2025 earnings on July 16, with analysts forecasting $0.90 per share, reflecting modest 8% year-over-year growth. I believe BAC is well-positioned to beat expectations, supported by conservative loan loss provisioning, ongoing share buybacks, strength in its Global Markets division, and higher net interest income amid slower-than-expected Federal Reserve rate cuts. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter BAC stock currently trades at $45, within striking distance of its all-time high of $47 per share. With resistance clearly set, BAC stock will need a strong catalyst to make further headway beyond $50 per share. Given the lack of clear catalysts, I remain Neutral on BAC stock. It currently trades at 1.66x tangible book value and 12.6x 2025 earnings—a valuation that's lower than peers like JPMorgan Chase (JPM), but still richer than that of many U.S. regional banks. Heading into Q2 2025, Bank of America's provisioning appears notably conservative. The bank's macroeconomic outlook assumes an unemployment rate of just below 5% by the end of 2025, remaining at that level through 2026, which is slightly more pessimistic than the Federal Reserve's projection of 4.5% for both years. Similarly, Bank of America forecasts 1% GDP growth in Q4 2025, undercutting the Fed's more optimistic estimate of 1.4%. In short, Bank of America's current reserves already reflect a cautious economic view, making it unlikely to build a significant provision in Q2 2025. The bank appears to have already accounted for a moderate economic slowdown later this year and into 2026. Analysts expect Bank of America to deliver earnings of $0.90/share in Q2 2025, up 8% year-over-year. This would represent a marked slowdown from the 18% annual increase observed in the first quarter of 2025. I believe the projected 8% EPS growth is overly conservative. Based on my estimates, share repurchases alone could contribute around 5% EPS growth. Additionally, Bank of America is likely to raise its net interest income (NII) guidance, as the Federal Reserve is now expected to deliver only two rate cuts in 2025, compared to the four cuts the bank had initially anticipated in its own outlook. I also expect slightly stronger performance from the Global Markets division, supported by heightened market volatility early in Q2 2025, which could contribute a paltry $0.02 per share to earnings. In summary, I expect Bank of America to modestly beat consensus earnings estimates, driven by conservative provisioning, upward NII revisions, and a slight lift from trading activity. My forecast is EPS of approximately $0.92 for Q2 2025. Based on my projections, Bank of America is on track to deliver earnings of approximately $3.57 per share in 2025, assuming consistent 8% growth in both Q3 and Q4 of 2024. This would translate to a return on tangible book value of around 13% for the year. However, this solid profitability appears to be largely priced in, with BAC stock trading at 1.66x its tangible book value of $27.12 per share. Its 2025 P/E multiple of 12.6x is more attractive than that of large peers like JPMorgan Chase (14.6x), but still above the average for regional banks, which trade closer to 10.7x forward earnings. Looking ahead to 2026, earnings growth is expected to moderate, with no repeat of the Global Markets tailwind and potential pressure from anticipated Fed rate cuts. Given this outlook, I believe a Hold rating is appropriate for BAC at current levels. This cautious stance is also supported by Berkshire Hathaway's ongoing reduction in its BAC stake, despite the stock remaining the firm's fourth-largest holding, which comprises 10.19% of Buffett's portfolio. The limited upside potential suggests it's wise to stay neutral for now. Turning to Wall Street, Bank of America earns a Strong Buy consensus rating based on 18 Buy and 2 Hold ratings over the past three months. Notably, not a single analyst is bearish on Bank of America. The average BAC stock price target is $49.38, implying a 9% potential upside. Bank of America's macroeconomic outlook remains more conservative than the Federal Reserve's, which suggests its earnings are better insulated in the event of a slowdown in U.S. economic activity later in 2025 and into 2026. I expect BAC to slightly beat Q2 2025 earnings estimates, supported by stronger net interest income, continued share repurchases, and a modest profitability boost from the Global Markets division. That said, I remain neutral on the stock. Like Warren Buffett, who has recently trimmed Berkshire's position in BAC, I believe the bank's solid profitability is already reflected in the stock's price, which trades at 1.66x tangible book value. Lastly, while Wall Street analysts maintain a Strong Buy rating, the implied upside of just 9.59% suggests limited near-term reward for new investors at current levels. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Why Advanced Micro Devices Stock Moved Higher Today
AMD stock jumped early in today's trading, but it gave up most of its gains as the market focused on risk factors for the tech sector and broader market. Investors are seeing signs that AMD is positioned to rack up wins in the artificial intelligence (AI) processor space. AMD's new AI processor and server products could deliver significant wins, but geopolitical dynamics and other factors could still create volatility for the stock. 10 stocks we like better than Advanced Micro Devices › Advanced Micro Devices (NASDAQ: AMD) stock ended Friday's trading in the green, despite pullbacks following a pop early in the session. The company's share price closed out the day up 1.1%, but it had been up as much as 4.7% earlier in the session. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) fell 0.2% in the daily session, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 0.5%. Thanks to rising excitement surrounding the company's position in artificial intelligence (AI), AMD stock opened today's trading with a big gain. The company's share price still advanced in the daily session, but it lost some ground as investors weighed new export restrictions for semiconductor technologies and the risk of escalating conflict in the Middle East. AMD stock has seen wild fluctuations over the last couple of years in conjunction with shifting expectations for the company's standing and market opportunity in the AI space. Following the Advancing AI 2025 conference hosted by the hardware specialist last week, market sentiment surrounding the stock has become significantly more bullish. At the conference AMD profiled its recently launched Instinct MI350 graphics processing unit (GPU) and its new server product for data centers. The company also announced that it had entered into a new deal to supply OpenAI with processing hardware, and its indications suggest that it may have also reached a new deal with Amazon. AMD appears to be making some laudable progress in the AI hardware market. While the company may continue to play second fiddle to Nvidia in the high-end data center GPU market, it will likely still have opportunities to score some big wins in the space. On the other hand, AMD stock could see high levels of volatility in the near term. Tech stocks wavered today following news that the Trump administration was implementing new bans on tech exports to China, and the market is also on edge about the possibility that the U.S. could get involved in the conflict between Israel and Iran. So even though AMD's AI growth bets appear to be moving in the right direction, there are other big catalysts that could shape stock performance in the near term. Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, and Nvidia. The Motley Fool has a disclosure policy. Why Advanced Micro Devices Stock Moved Higher Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Why B2Gold (BTG) Dipped More Than Broader Market Today
B2Gold (BTG) closed the most recent trading day at $3.64, moving -1.62% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.22%. Elsewhere, the Dow saw an upswing of 0.08%, while the tech-heavy Nasdaq depreciated by 0.51%. The gold, silver and copper miner's shares have seen an increase of 12.12% over the last month, surpassing the Basic Materials sector's gain of 2.25% and the S&P 500's gain of 0.45%. Market participants will be closely following the financial results of B2Gold in its upcoming release. In that report, analysts expect B2Gold to post earnings of $0.09 per share. This would mark year-over-year growth of 50%. Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.51 per share and revenue of $2.97 billion. These totals would mark changes of +218.75% and +56.23%, respectively, from last year. Investors should also take note of any recent adjustments to analyst estimates for B2Gold. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook. Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system. Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. B2Gold is holding a Zacks Rank of #3 (Hold) right now. From a valuation perspective, B2Gold is currently exchanging hands at a Forward P/E ratio of 7.24. This expresses a discount compared to the average Forward P/E of 13.26 of its industry. The Mining - Gold industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 50, which puts it in the top 21% of all 250+ industries. The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Be sure to follow all of these stock-moving metrics, and many more, on Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report B2Gold Corp (BTG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
