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Entrepreneur
Kurra Bewarse
Username: Entrepreneur
Post Number: 3489
Registered: 05-2011
Posted From: 65.35.45.47
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, May 10, 2021 - 10:44 pm: | 
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TTD The Trade Desk in Trade Down mode despite upside Q1 earnings and long-awaited stock split (532.48 -128.95)
The Trade Desk (TTD -19.5%) is in Trade Down mode today despite an upside earnings report and after announcing a 10-for-1 stock split.
Why is the stock getting sold off despite the upside results?
Probably the key reason is that TTD's Q1 upside was not as robust as that of other digital ad plays. TTD is reporting on the tail end of earnings season, so at this juncture, we can compare this report against plenty of others. Facebook (FB), Alphabet (GOOG), and most recently Roku (ROKU) were all standouts. However, TTD's Q1 revenue of $219.8 mln was just barely above the $217.3 mln consensus, which was a disappointing surprise.
Also, most companies would be thrilled to beat EPS consensus by $0.60, but that beat paled in comparison to TTD's $1.83 upside in Q4 and was TTD's smallest beat since 1Q20, when the pandemic started. Granted, Q1 is a seasonally slower period for TTD, and Q4 benefited from higher demand due to election season and the holidays. However, TTD's Q1 results were a letdown relative to TTD's recent large beats.
TTD was also pretty cautious in terms of its commentary, and this may be weighing on the stock as well. TTD says its business has been impacted by the pressure that the pandemic has applied to advertiser demand. Like many companies that are ad-funded, TTD says it's facing a period of higher uncertainty in its business outlook.
With vaccines rolling out and people traveling again and eating out more, we would have expected a more upbeat outlook about the balance of 2021. That's especially the case because CTV (streaming TV) has done well during the pandemic amid customers' increased at-home time. It's true that some advertisers like online travel and restaurants had pulled back budgets, but TTD's language seems more cautious than we would have expected.
The stock has been trending down in recent months and had been down 32% from its December highs even before today's sell-off. We think a looming concern has been big tech's shift toward consumer privacy. Google plans to phase out third-party cookies on its Chrome browser. Also, Apple (AAPL) recently rolled out iOS 14.5, which requires an opt-in to give apps permission to track people's activity across other apps and the web.
Digital ads are not going anywhere, but there is the potential that they will become less valuable over time if individual browsing behavior is not being tracked. An Engadget article over the weekend said that only 4% of US iPhone users have agreed to app tracking. TTD knows its business better than we do, and we think its somewhat cautious comments about its outlook may be spooking investors about this issue.
Finally, TTD rallied 8% on Friday on Roku's strong Q1 report, so expectations were running high for TTD. With that said, we are a little surprised the stock is down this much. While the quarter was not up to par with other digital ad plays, it did not seem to warrant a drop of this magnitude. But such is life when a stock trades above 20x sales; investors can get spooked easily. It is also dragging down Magnite (MGNI -13%), a sell-side advertising platform. |
Entrepreneur
Kurra Bewarse
Username: Entrepreneur
Post Number: 3486
Registered: 05-2011
Posted From: 65.35.45.47
Rating: N/A
Votes: 0 (Vote!) | | Posted on Thursday, May 06, 2021 - 12:55 pm: |
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Price check
MGNI 31.04--> High(64.39) --> 32.82
PUBM 28.21--> High (74.65) --> 38.76
CRTO 20.80--> High (37.18) --> 38.58
ACUIF 13--> High (26.17) --> 10.14
FLNT 5.73 --> High (8.5) --> 3.28
KBNT --> 7.12 --> 5.81
DSP --> 32 |
Entrepreneur
Kurra Bewarse
Username: Entrepreneur
Post Number: 3485
Registered: 05-2011
Posted From: 65.35.45.47
Rating: N/A
Votes: 0 (Vote!) | | Posted on Thursday, May 06, 2021 - 12:53 pm: |
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Price check
MGNI 31.04--> High(64.39) -->48.87 -->40.77
PUBM 28.21--> High (74.65) --> 64.81 --> 56.25
CRTO 20.80--> High (37.18) --> 34.39 --> 34.56
ACUIF 13--> High (26.17) --> 22.18 --> 12
FLNT 5.73 --> High (8.5) --> 6.33 --> 4.14
KBNT --> 7.12 |
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