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Why The Trade Desk Climbed 22.9% in January

By Steve Symington – Updated Apr 10, 2019 at 12:53PM

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The programmatic ad leader jumped on multiple positive analyst notes. Here's what investors need to know.

What happened

Shares of The Trade Desk (TTD 8.98%) rose 22.9% in January, according to data from S&P Global Market Intelligence, as multiple analysts recommended buying the programmatic advertising specialist ahead of its upcoming fourth-quarter report.

First, on January 9, Jefferies analyst Brent Thill suggested investors to be "selective" about which internet-centric stocks they buy in 2019, naming The Trade Desk among a handful of companies worthy of consideration. 

Then, the following week, Susquehanna's Shyam Patil reiterated his own "positive" rating and $140-per-share price target on Trade Desk stock. To justify the call, Patil cited checks showing that Trade Desk's momentum "remains strong," adding it should benefit from incremental growth from new products and expanding into emerging markets.

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So what

The timing of these bullish calls was no coincidence. The Trade Desk stock fell 18.5% in December due to a combination of the broader market's decline (the S&P 500 fell 9% to end 2018) and -- to a lesser extent -- the company's (not extraordinary) announcement of the resignation of its chief operating officer. 

As the broader markets rebounded in January, though, it's clear many investors and analysts alike were quick to seize The Trade Desk's short-term weakness as a buying opportunity.

Check out the latest The Trade Desk earnings call transcript.

Now what

Time will tell whether these positive notes from Wall Street were merited. But as it stands, we'll know more about its near-term momentum when The Trade Desk releases fourth-quarter 2018 results on February 21, 2019, after the market closes. Given the broader market's rise and optimism surrounding Trade Desk's business in the meantime, it was hardly surprising to see the stock respond in kind last month.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc. and The Trade Desk. The Motley Fool has a disclosure policy.

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