The Trade Desk (TTD -6.23%) has had a pretty dreadful 2022, with the stock down around 46% this year. Many investors might wonder whether the stock has further to go before bottoming or 2023 will be the start of a new bull run.

There are no fancy charts to tell us where The Trade Desk's stock is heading; instead, I'll focus on the stock's business, financials, and valuation to see what's potentially ahead.

A critical tool for advertisers

The Trade Desk's software helps advertisers purchase ad space and determine the best place to advertise. Using various analytics, advertisers can tweak advertising campaigns to focus on what is working and reduce what isn't, so each dollar spent on advertising generates a maximum return.

Because The Trade Desk's software is a tool bought on a subscription basis rather than an actual advertisement, the business is much steadier than one directly involved with ad buying or selling. This makes customer churn less likely, and The Trade Desk's 95% customer retention rate over the past eight years backs that up.

Targeted advertising has some privacy concerns, mainly with cookies. So The Trade Desk created Unified ID 2.0 (UID2) as an open-source technology that generates anonymous IDs, protecting users' privacy. UID2 is also more accurate than cookies, as the user's profile sticks with them across all devices. That makes it easier to place the correct ads in front of the viewer on connected TVs, for instance.

The business model and execution for The Trade Desk are rock-solid, and the financials complement it further.

Revenue and earnings growth will be strong in 2023

Unlike many advertising-related companies in 2022, The Trade Desk has maintained its rapid growth pace, with revenue rising 31% year over year (YOY) to $395 million in the third quarter. It's also marginally profitable, posting a net income of $16 million.

That metric would have been greater if not for a one-time $66 million CEO performance grant. The pay package should be wrapped up by the end of 2022, meaning profits should show a significant increase in 2023 as long as it's responsible with its expenses.

As the U.S. advertising market weakens, The Trade Desk may look to expand overseas. Of The Trade Desk's 2021 revenue, 14% came from international sources, even though 67% of global advertising spend from all sources occurs outside the U.S. This represents a huge growth opportunity for The Trade Desk and is a crucial long-term growth catalyst for investors.

Another boost The Trade Desk could experience is the return of advertising interest as the economy recovers. I don't know whether this will happen in 2023, but stocks are forward-looking, and The Trade Desk's recovery will likely begin long before the economy rebounds.

As for the stock's valuation, it trades at 48 times free cash flow and 16 times sales. Even with the stock's 2022 decline, that isn't a cheap price to pay for a stock. However, The Trade Desk has been a best-in-class executor and is addressing a massive market opportunity in advertising. This optimism is reflected in the valuation, although with less hubris than in 2021.

Will 2023 be the turnaround year for The Trade Desk's stock? I think it's likely. But I wouldn't expect outsized returns. The Trade Desk will likely maintain its valuation and return at a level similar to its revenue growth, which Wall Street analysts project will be 21%. And 21% is nothing to snub your nose at -- that's double the market's long-term average return.

This projection could be completely wrong, as another investment catalyst could come in and significantly shift the outlook. However, The Trade Desk's long-term growth trajectory is still strong, making me bullish on the stock regardless of what happens with its price in 2023.