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Why The Trade Desk Stock Skyrocketed in November

By Anders Bylund – Dec 9, 2021 at 12:54PM

Key Points

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The surge started with a stellar earnings report and was boosted by a promising partnership.

What happened

Shares of The Trade Desk (TTD 1.36%) gained 38.1% in November, according to data from S&P Global Market Intelligence. The bulk of these stellar returns fell on Nov. 8, when the digital advertising specialist delivered an analyst-stumping earnings report.

So what

The Trade Desk's third-quarter sales came in at $301 million, 39% above the year-ago reading and 6% above Wall Street's consensus estimates. Adjusted earnings fell from $1.27 to $0.18 per share, but your average analyst would have settled for $0.15 per share.

The stock closed 29.4% higher that day as investors embraced the concrete evidence of healthy business trends. Another 9.4% surge followed the next day when several analysts issued their glowing reports on the third-quarter update.

The next week, The Trade Desk earned a 5.9% surge as the company expanded its advertising partnership with Comcast subsidiary NBCUniversal. This deal gave The Trade Desk's ad-buying customers access to NBCU's video-streaming service, Peacock. That's one more feather in the ad-supply platform's highly decorated cap, and another win squarely in The Trade Desk's video-based ad campaign wheelhouse.

A hand points a TV remote at a wall with dozens of screens, all showing different content.

The natural habitat for The Trade Desk's video-based ad services. Image source: Getty Images.

Now what

The company is navigating the sea changes in the digital advertising space with confidence, thanks to an unmatched portfolio of long-term relationships with both advertisers and publishing platforms. The Trade Desk has built its products and services around the data gleaned from these valuable market connections. As a result, this ad platform operates from a unique position of strength.

That being said, I'm a happy shareholder but not exactly itching to add shares to my Trade Desk position after November's powerful surge. The stock is more than fully valued at 45 times trailing sales and 108 times forward earnings. In my eyes, this is one of those long-term investments I like to leave untouched for months or years at a time. However, I'd be happy to pick up more Trade Desk stock on the inevitable dips along the way.

Anders Bylund owns The Trade Desk. The Motley Fool owns and recommends The Trade Desk. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.

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