Susquehanna Starts The Trade Desk (TTD) at Positive
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Susquehanna initiates coverage on recent IPO The Trade Desk (NASDAQ: TTD) with a Positive rating and a price target of $40.00.
Analyst Shyam Patil highlighted the following:
- Based on our extensive checks with agencies, ad exchanges, SSPs, and publishers, we view The Trade Desk as the top independent DSP in the market, and the primary alternative to Google’s DBM.
- We believe TTD’s focus on technology innovation, superior bid factors and decisioning, data integration and customer-aligned business model have enabled the company to gain meaningful market share over the past two to three years. According to our math, we estimate that TTD has roughly doubled its market share in the U.S. since 2014, from 5% to 10% in 2016, and still has ample room to grow.
- In the U.S. alone, the non-direct RTB market is expected to reach $9 billion in 2016 and grow at a 26% CAGR to reach $14 billion in 2018. In addition to the U.S. opportunity, we believe International (ex U.S.) and programmatic TV will provide further runway for growth.
- Estimates should move higher. Upside to numbers seems likely as TTD should continue to outpace overall RTB market growth. As we detail in our report, our base-case scenario conservatively assumes that TTD only grows slightly above market rates (1.3x in 2017 and 1.2x in 2018), after growing 4x the market in 2015 and currently on track to grow >2x in 2016.
- With positive estimate revisions and continued demonstration of TTD’s market leading offering, we see valuation upside in the $40-$55 range over the next 12-18 months.
Shares of The Trade Desk closed at $30.10 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Hot New Coverage, IPOs, New Coverage
Related EntitiesSusquehanna International Group of Companies, IPO
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