Please ensure Javascript is enabled for purposes of website accessibility

Is This a Buying Opportunity for Trade Desk Stock?

By Jose Najarro - May 11, 2021 at 12:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Trade Desk lost more than 25% of its valuation in one day after reporting earnings. Is this a buying opportunity?

In today's video, I look at Trade Desk (TTD -1.50%) earnings. The stock price dropped over 25% in one day after the company reported earnings on May 10 that did better than expected. Below I share three reasons why this might be a buying opportunity.

Three Reasons to Add Trade Desk to Your Watch List.

  1. Trade Desk's most recent earnings reported 37% Y/Y revenue growth, better than the overall consensus of analysts. The revenue guidance that Trade Desk provided is also higher than what analysts were expecting. 
  2. Trade Desk fundamentally is in a strong place as it currently has no debt and roughly $679M in cash and short-term investments. Adjusted EBITDA Margins have also improved to 32% this quarter compared to 24% same time last year.
  3. With the stock price dropping approximately 50% from its 52-week high, Trade Desk now has a FWD Price to Sales ratio of roughly 16. 

Click the video below for my full thoughts. 

*Stock Prices used were the midday prices of May 10, 2021. The video was published on May 10, 2021. 

Jose Najarro owns shares of Magnite, Inc. The Motley Fool owns shares of and recommends Magnite, Inc and The Trade Desk. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Trade Desk Stock Quote
The Trade Desk
$69.12 (-1.50%) $-1.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.