Latest news with #TheTradeDesk
Yahoo
an hour ago
- Business
- Yahoo
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 Investment Research
Yahoo
5 hours ago
- Business
- Yahoo
2 Ad Tech Stocks That Could Help Make You a Fortune
The streaming sector is regaining momentum after a post-pandemic lull. Roku just made a new deal with Amazon and is making progress toward profitability. The Trade Desk is seeing solid growth, but is trading at a significant discount. 10 stocks we like better than The Trade Desk › Artificial intelligence (AI) got the bulk of interest from tech investors in the past couple of years, but it's not the only tech sector with upside potential. One industry that is delivering solid growth and still has a long runway ahead of it is ad tech. Digital media has transformed advertising. Alphabet and Meta Platforms are the biggest winners in the industry, but there are others benefiting as well, including ad tech companies taking advantage of continued growth in areas such as connected TV, retail media, better ad targeting, and improvements enabled by AI. Keep reading for more details on two of these ad tech stocks that can make investors a fortune. There's no getting around it: Roku's (NASDAQ: ROKU) performance disappointed investors in recent years. Roku's stock price remains down more than 80% from its peak in 2021. That's when the pandemic-driven boom quickly faded as the economy reopened and the streaming industry's surging growth hit a wall. Roku was forced to do several rounds of layoffs, having overspent during the pandemic. But the business and the streaming industry more broadly underwent a reset and are prepared for growth. Netflix's stock soared to an all-time high recently as its ad tier has taken off. Walt Disney is now making a profit in its streaming division, and the stock recently hit a 52-week high, while Warner Bros. Discovery is splitting into two companies, one focused on studios and the other on streaming. Streaming services appear to be moving past their post-pandemic struggles, and Roku should benefit. Despite the stock's woes, the business continues to deliver solid growth, with revenue up 16% year over year in the first quarter to $1.02 billion, and its bottom line is improving as well. The company also expects to report an operating profit using generally accepted accounting principles (GAAP) metrics. There are also other signs of building momentum. The stock price jumped on Monday after the company announced an exclusive integration with Amazon's demand side platform, and it's also gaining share of listings on retail sites such as Amazon and Target, a sign that it's probably gaining market share as well. As the leading streaming distribution platform, Roku is well-positioned to capitalize on continued growth in connected TV, and at a market cap of $11 billion, the stock could easily double, triple, or better from here, especially if it hits its profit goal. As the leading independent demand-side ad tech platform, The Trade Desk (NASDAQ: TTD) has been a longtime winner on the stock market. The Trade Desk consistently innovates with new technology, including its AI platform Kokai, its Unified ID 2.0 cookieless tracking protocol, and its OpenPath supply path optimization program. Now looks like an especially good time to buy shares of the Trade Desk because they're on sale, trading down 50% from their peak late last year. That's partly due to a disappointing earnings report in February, when the ad tech company missed its own guidance for the first time since its IPO. At the time, CEO Jeff Green said a few internal errors contributed to the miss, rather than a competitive threat or macroeconomic weakness. In the first quarter, the company redeemed itself, reporting 25% year-over-year revenue growth to $616 million. The Trade Desk was one of the few digital advertising companies to continue to deliver strong growth, showing its ability to grow in any type of market environment. Looking ahead, The Trade Desk continues to gain support for its cookieless tracking solution, growing its larger customer ecosystem and making the platform even stronger. The Trade Desk looks well-positioned to continue delivering steady growth, and investors can capitalize on a rare discount in the stock right now. Before you buy stock in The Trade Desk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and The Trade Desk 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!* Now, it's worth noting Stock Advisor's total average return is 992% — 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 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon, Meta Platforms, Netflix, Roku, Target, The Trade Desk, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Netflix, Roku, Target, The Trade Desk, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy. 2 Ad Tech Stocks That Could Help Make You a Fortune 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
a day ago
- Business
- Yahoo
The Trade Desk Repurchases $386M Stock: A Smart Capital Move?
The Trade Desk, Inc. TTD announced in its first-quarter 2025 earnings release that it used $386 million in cash to buy back its common stock. Strong balance sheet and consistent cash flow aided the repurchases. Operating cash flow was $291 million while free cash flow was $230 million in the first quarter, so the buyback exceeded quarterly cash generation. The company's balance sheet remained strong at the end of the first quarter with approximately $1.7 billion in cash, cash equivalents and short-term investments, and it has no debt. In prior filings, TTD's board authorized a large repurchase program. In January 2025, an additional $564 million was approved, bringing the total authorization to $1 billion. 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 Trade Desk emphasizes a balanced, efficient cost structure to stay agile amid evolving conditions. TTD continues to drive advancements in the advertising world with fresh launches and collaborations. In June 2025, the company announced an expanded partnership with HOY, the media platform operated by i-CABLE Communications Limited. Moreover, it unveiled Deal Desk, an innovation within its Kokai platform designed to enhance how advertisers and publishers manage one-to-one deals and upfront commitments. For the second quarter of 2025, the company expects revenues of at least $682 million, suggesting 17% year-over-year growth, assuming stable macroeconomic conditions. This includes the impact of lapping prior political ad spend, which contributed around 1% to the prior-year quarter revenues. Adjusted EBITDA is expected to be about $259 million for the second quarter. Supported by a healthy balance sheet and steady cash generation, The Trade Desk plans to continue opportunistic buybacks and offset dilution from employee stock grants. Magnite, Inc. MGNI announced a new share buyback program in February 2024, authorizing up to $125 million in repurchases, which includes both common stock and convertible notes. This program runs through Feb. 1, 2026. The stated objective is to return capital to shareholders and manage potential dilution related to convertible instruments. As of the end of the first quarter of 2025, Magnite had already utilized a portion of this authorization, leaving $88 million available for strategic deployment under the plan. PubMatic, Inc. PUBM has also been aggressive in its capital return initiatives. The company initially had a $75 million buyback program in place, which was expanded by $100 million in February 2024 and again by another $100 million in May 2025. This brings the total authorization to $275 million, with the latest extension running through the end of 2026. PubMatic's management stated that the buyback reflects confidence in the company's long-term value and strong financial position. As of the end of March 2025, the company had spent approximately $138.2 million to repurchase around 8.7 million shares, demonstrating consistent execution of the buyback strategy. Shares of TTD have plunged 29.5% in the past year against the Zacks Internet -Services industry's growth of 0.6%. Image Source: Zacks Investment Research From a valuation standpoint, TTD trades at a forward price-to-sales of 10.88X, higher than the industry's average of 5.18X. Image Source: Zacks Investment Research TTD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Magnite, Inc. (MGNI) : Free Stock Analysis Report PubMatic, Inc. (PUBM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
History Says the Nasdaq Will Soar: 1 Brilliant AI Stock to Buy Now, According to Wall Street
The Nasdaq Composite has advanced 11% annually during the last four decades, which hints at significant upside in the years ahead. The Trade Desk is the largest independent demand-side platform in the adtech industry, and the company is leaning into artificial intelligence (AI). Adtech spending is forecast to grow at 14% annually through 2030, meaning The Trade Desk's earnings can grow even faster if it continues to gain market share. 10 stocks we like better than The Trade Desk › Earlier this year, the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped into market correction territory as investors reacted to the prospect of sweeping tariffs. However, the index has historically rebounded sharply following those incidences, producing an average 12-month return of 21% following corrections since 2010. More broadly, the Nasdaq Composite has returned 11% annually over the last four decades. That suggests the index is headed much higher in the future. Buying stock in The Trade Desk (NASDAQ: TTD) is a smart way for patient investors to lean into that possibility. Wall Street's median target price of $84 per share implies 23% upside from the current share price of $68. Here are the important details. The Trade Desk is an adtech company that operates the largest independent demand-side platform (DSP), software that helps businesses plan, measure, and optimize data-driven advertising campaigns across digital channels. The company has a particularly strong presence in two of the fastest-growing advertising verticals: connected TV (CTV) and retail media. The Trade Desk's independent business model -- meaning it does not own media content and has no reason to steer clients toward specific advertising inventory -- is an important advantage. It distinguishes the company from rivals like Alphabet's Google, Amazon, and Meta Platforms, all of which have an incentive to sell their own ad inventory to media buyers, whether or not it's the best option. Frost & Sullivan analysts recently recognized The Trade Desk as the most technologically sophisticated DSP on the market. The company has been building artificial intelligence (AI) into its software for years. Its 2023 launch of the Kokai platform introduced new AI features that let agencies manage budgets, prioritize ad impressions, and target consumers. CEO Jeff Green said Kokai adoption was "ahead of schedule" on the first-quarter earnings call, and he thinks all clients will be using the platform by year-end. The Trade Desk is monetizing AI in other ways as well. Its recent partnership with Rembrand will allow brands to use generative AI to create advertising content. That partnership expands its existing generative AI marketplace. Meanwhile, the company recently reorganized its sales teams to build direct relationships with larger brands rather than working solely with advertising agencies. It also restructured its engineering teams to ship smaller updates more frequently. Those changes have already had an impact on its financial performance. In the first quarter, the Trade Desk reported a 25% increase in sales and a 27% increase in non-GAAP (generally accepted accounting principles) earnings. Importantly, The Trade Desk stock fell sharply after the company missed its fourth-quarter revenue guidance. Investors worried that increased competition from Amazon could pose a serious problem for the company, but I think the market overreacted. The Trade Desk has built trust with clients due to its independent business model, something that Amazon lacks. Indeed, Baron Capital analysts believe the competitive landscape remains quite favorable for The Trade Desk, saying in the firm's first-quarter report: "The market has shown a strong preference for independent and objective platforms that are not vertically integrated with media owners. We believe large advertisers will continue to value The Trade Desk's independence, transparency, and neutrality." With that in mind, The Trade Desk is well positioned to grow its business. Adtech spending is forecast to increase at 14.4% annually through 2030, according to Grand View Research. That should translate into slightly stronger earnings growth as the company continues to gain market share, which makes the current valuation of 40 times adjusted earnings look reasonable. Before you buy stock in The Trade Desk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and The Trade Desk 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!* Now, it's worth noting Stock Advisor's total average return is 992% — 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 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy. History Says the Nasdaq Will Soar: 1 Brilliant AI Stock to Buy Now, According to Wall Street was originally published by The Motley Fool
Globe and Mail
2 days ago
- Business
- Globe and Mail
History Says the Nasdaq Will Soar: 1 Brilliant AI Stock to Buy Now, According to Wall Street
Earlier this year, the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped into market correction territory as investors reacted to the prospect of sweeping tariffs. However, the index has historically rebounded sharply following those incidences, producing an average 12-month return of 21% following corrections since 2010. More broadly, the Nasdaq Composite has returned 11% annually over the last four decades. That suggests the index is headed much higher in the future. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Buying stock in The Trade Desk (NASDAQ: TTD) is a smart way for patient investors to lean into that possibility. Wall Street's median target price of $84 per share implies 23% upside from the current share price of $68. Here are the important details. The investment thesis for The Trade Desk The Trade Desk is an adtech company that operates the largest independent demand-side platform (DSP), software that helps businesses plan, measure, and optimize data-driven advertising campaigns across digital channels. The company has a particularly strong presence in two of the fastest-growing advertising verticals: connected TV (CTV) and retail media. The Trade Desk's independent business model -- meaning it does not own media content and has no reason to steer clients toward specific advertising inventory -- is an important advantage. It distinguishes the company from rivals like Alphabet 's Google, Amazon, and Meta Platforms, all of which have an incentive to sell their own ad inventory to media buyers, whether or not it's the best option. Frost & Sullivan analysts recently recognized The Trade Desk as the most technologically sophisticated DSP on the market. The company has been building artificial intelligence (AI) into its software for years. Its 2023 launch of the Kokai platform introduced new AI features that let agencies manage budgets, prioritize ad impressions, and target consumers. CEO Jeff Green said Kokai adoption was "ahead of schedule" on the first-quarter earnings call, and he thinks all clients will be using the platform by year-end. The Trade Desk is monetizing AI in other ways as well. Its recent partnership with Rembrand will allow brands to use generative AI to create advertising content. That partnership expands its existing generative AI marketplace. Meanwhile, the company recently reorganized its sales teams to build direct relationships with larger brands rather than working solely with advertising agencies. It also restructured its engineering teams to ship smaller updates more frequently. Those changes have already had an impact on its financial performance. In the first quarter, the Trade Desk reported a 25% increase in sales and a 27% increase in non-GAAP (generally accepted accounting principles) earnings. The Trade Desk stock trades at a reasonable price Importantly, The Trade Desk stock fell sharply after the company missed its fourth-quarter revenue guidance. Investors worried that increased competition from Amazon could pose a serious problem for the company, but I think the market overreacted. The Trade Desk has built trust with clients due to its independent business model, something that Amazon lacks. Indeed, Baron Capital analysts believe the competitive landscape remains quite favorable for The Trade Desk, saying in the firm's first-quarter report: "The market has shown a strong preference for independent and objective platforms that are not vertically integrated with media owners. We believe large advertisers will continue to value The Trade Desk's independence, transparency, and neutrality." With that in mind, The Trade Desk is well positioned to grow its business. Adtech spending is forecast to increase at 14.4% annually through 2030, according to Grand View Research. That should translate into slightly stronger earnings growth as the company continues to gain market share, which makes the current valuation of 40 times adjusted earnings look reasonable. Should you invest $1,000 in The Trade Desk right now? Before you buy stock in The Trade Desk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and The Trade Desk 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!* Now, it's worth noting Stock Advisor 's total average return is992% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.
