After a 50% Crash, This Tech Stock Is a Tremendous Value
Key Takeaways
Ing viewership surpassed the combined total of broadcast and cable viewership for the first time ever in May 2025. This is a years-long trend that has seen ing viewership catapult...
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investment
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July 6, 2025
07:45 AM
The Motley Fool
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Ing viewership surpassed the combined total of broadcast and cable viewership for the first time ever in May 2025
This is a years-long trend that has seen ing viewership catapult 71% over the past four years -- even as broadcast and cable viewership dropped 21% and 39%, respectively
Investors should be asking themselves which companies are ly to benefit significantly from the shift of broadcast and cable viewers to ing services
The Trade Desk (TTD 1. 07%) is one of them, and its stock is on sale
The Trade Desk has a tremendous future If you're not entirely sure exactly what The Trade Desk does, here it is in a nutshell
The Trade Desk software is a Demand Side Platform, or DSP
This means that it executes grammatic advertising purchases on behalf of its clients
It works this: When a website, ing service, social media platform, or other digital service has ad space to sell, it sends out a bid request
The DSP responds in real time with a bid based on preset criteria for its client's ad campaign
The ad then instantly appears
The Trade Desk adds value to its service by viding its clients with a wealth of useful data
Image source: Getty Images
The grammatic ad market is already massive and continues to grow rapidly
Sources estimate that 91% of digital advertising and at least 56% of total global advertising is grammatic
For perspective, global advertising spending is expected to hit $1 trillion this year
As shown below, grammatic advertising spending is expected to reach $299 billion this year in the U
Alone and is jected to increase to $414 billion over the next few years
The Trade Desk is poised to benefit greatly, and stockholders should be rewarded handsomely over the long haul
Is The Trade Desk a buy now
The Trade Desk stock slumped after it missed its earnings estimates for the first time in eight years in the fourth quarter of 2024; however, the sell-off is considerably overdone
The fall has caused several valuation metrics to dip well below historical averages
For instance, the company's price-to-sales ratio (a common metric to value high-growth nology companies) is 82% off its five-year average: TTD PS Ratio data by YCharts The ratio drops under 13 on a forward basis
The market is pricing The Trade Desk a distressed, but it is far from that
The earnings miss in Q4 2024 was disappointing
However, sales still grew 22% year over year to $741 million in the quarter and 26% for the full year, eclipsing $2
The Trade Desk has since reported encouraging Q1 2025 results
Growth accelerated to 25%, with sales reaching $616 million year over year
Operating income nearly doubled over the prior year, going from $28. 7 million to $54
The company is also on firm financial footing, with $1. 7 billion in cash and investments on hand, and current assets of $4. 9 billion, compared to $2. 7 billion in current liabilities
Common stock of $386 million was also repurchased during the quarter
When a company buys back its stock, the number of s available decreases, making existing s more valuable
In short, The Trade Desk is growing rapidly, in great financial shape, and considerably undervalued, making it look a great buy for investors right now
Bradley Guichard has positions in The Trade Desk
The Motley Fool has positions in and recommends The Trade Desk
The Motley Fool has a disclosure policy.
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