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TTD – Market expectations are for record-high Uniform ROA, but management may have concerns about revenue growth, industry leadership, and UID2

June 21, 2021

  • The Trade Desk, Inc. (TTD:USA) currently trades well above corporate averages relative to UAFRS-based (Uniform) earnings, with an 88.2x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about revenue growth, advertising industry leadership, and the potential of UID2

  • Specifically, management may lack confidence in their ability to accelerate revenue growth, maintain operating cash flow generation, and gain additional spending from existing customers.  In addition, they may be exaggerating the potential and current scale of UID2 and the ability of CTV to drive revenue growth. Furthermore, management may lack confidence in their ability to develop a CTV upfront market and continue leading the advertising industry through their partnerships and data integration capabilities. Moreover, they may have concerns about the effectiveness of ads without cookies and consent issues regarding the exchange of consumer data for free content on the Internet