Shares of The Trade Desk, Inc. (TTD) are trading higher on Wednesday after B of A Securities analyst Jessica Reif Ehrlich initiated coverage on the company with a Buy rating and a price target of $135. The analyst believes TTD is strategically positioned to benefit from the growth of Connected TV (CTV) and Retail Media advertising.
Ehrlich highlights TTD’s strong competitive edge in programmatic advertising, driven by its culture of innovation and clear vision. The analyst also emphasizes the company’s focus on identity solutions, like UID 2.0, which benefits both TTD and the industry as a whole by promoting a more open internet.
Despite recent strong performance, TTD has ample room for growth in both revenue and profit, according to Ehrlich. She notes that the linear advertising market, valued at over $60 billion, is facing secular challenges and is likely to lose market share. This presents an opportunity for TTD, particularly in CTV and other digital areas where it is well-positioned.
Ehrlich identifies several significant growth drivers for TTD, including the expanding Retail Media market, audio advertising, and international opportunities. Over the next three years, she expects TTD’s revenue to grow at approximately 23% CAGR and EBITDA at around 27% CAGR.
Investors can gain exposure to TTD through SmartETFs Advertising & Marketing Technology ETF (MRAD) and Pacer Nasdaq 100 Top 50 Cash Cows Growth Leaders ETF (QQQG).
As of Wednesday’s close, TTD shares were up 1.57% at $102.56.
