The Trade Desk, Inc. [NASDAQ: TTD]: It has been a volatile week for tech stocks following news that U.S regulators could be looking to institute anti-trust investigations on big tech companies. However, this information seems to have filtered into the market, and things are looking up again. The market also seems to be looking up on the news that the Federal Reserve is ready to cut interest rates, in case the economy starts showing signs of weakness. These positive news have renewed momentum in high-growth technology stocks such as TTD. This stock was up by 12% in Tuesday trading, and is trading in positive territory in pre-market trading.
TTD is a programmatic advertising company that has the potential to change the face of advertising going into the future. TTD uses high-speed advertising to buy and sell adverts in real time. This makes advertising more real time, making them more effective in reaching consumers. Given the growing importance of online advertising, the value of TTD is likely to keep growing going into the future. Statistics place the growth rate of programmatic advertising at 19% this year and predicts that it could hit $98 billion market by the year 2020. This adds to the underlying bullish sentiment for companies like TTD.
Besides the market fundamentals that are supporting this stock, TTD’s books paint the picture of a very healthy company. The company’s revenues are on a growth path. Its quarterly revenues have grown by 41.20% year-over-year. Profit margins are quite high too, and stand at 17.41%, with an operating margin of 20.10%. The company’s books also paint the picture of a company that has an efficient management. This is quite clear in its return on equity, which stands at 25.77%. It goes to show that TTD’s management is making efficient use of the resources at their disposal.
It’s also noteworthy that TTD has quite a high beta, which stands at 2.89. This simply means that when the market is rising, TTD is likely to gain at a higher rate. In the last 52-weeks, this stock has outperformed the S&P 500 by a huge margin, returning 128.84% in gains. In essence, with the Federal Reserve ready to support the markets in case of weakness, positive momentum could return to the market, and high beta stocks like TTD stand to gain the most in the second half of the year.
From a look at the charts, TTD is bullish, with the 50-day MA acting as a key support on the monthly charts at $203.15. With the NASDAQ showing bullish sentiment, TTD and other tech stocks could trade in the green when markets open.