How Much Is Too Much To Pay For Disruptive Tech

[View in browser]( TOGETHER WITH: Proprietary Data Insights Financial Pros Top Non-Mega Cap Digital Marketing Stock Searches This Month Rank Name Searches #1 Digital Turbine 79 #2 Pubmatic Inc Cl A 77 #3 Trade Desk Inc 74 #4 Fluent Inc 40 #5 Omnicom Group Inc 11 Sponsored [5 Metaverse Stocks Set to Soar]( Get the new report revealing top profit plays for the internet's next evolution. Early investors still have time to get in near the "ground floor" of this $30 trillion opportunity. Check out 5 surprising stocks to help you cash in. [Access the report now.]( Technology How Much Is Too Much To Pay For Disruptive Tech The global programmatic advertising market is expected to hit $150 billion by 2023. That’s an annual growth rate of 22%, according to sources at Market Research Future. While we all know Google (GOOGL) is one of the top dogs in the space. However, it now faces greater competition. One of those companies going after Google is The Trade Desk (TTD). Like most tech names, shares have taken a significant dive in 2022. When we looked at what we like to refer to as the ‘2nd Tier’ digital advertising companies, The Trade Desk used to see hundreds of searches each week, whether we looked at retail or financial pros. Yet, as many of the momentum technology names like TTD, such as Zoom (ZM), Fastly (FSLY), and the like sold off, interest began to wane. That’s actually a good sign as it lends names to overshoot to the downside. [The Economist, Morning Brew, FT, WSJ, Bloomberg and now…(Sponsored)]( THE JUICE: want access to mainstream investor content? Then don't sign up here. Because our daily investment newsletter provides you unique access to content and data that comes from the best minds and research in investing. [Click here to sign up]( The Trade Desk (TTD) Business TTD operates a self-service cloud-based media-buying platform. It allows buyers to create, manage, and optimize data-driven digital advertising campaigns in various ad formats and channels, including display, video, audio, in-app, native, and social, and on various devices, such as computers, mobile devices, and connected TV. TTD serves advertising agencies and other service providers for advertisers. The company has over 225 partners, they include media heavy hitters like Disney, Tik Tok, Fox, ESPN, Hulu, WSJ, and Spotify In 2021 the gross spend on its platform was approximately $6.2 billion, a 47% increase YoY. What’s really impressive about TTD is its product stickiness. Customer retention is over 95%, which has been consistent for the last 8 years. It should come as no surprise that the company has accumulated several accolades, including Fortune’s 100 Fast Growing Companies for 2021 and Forbes Global 2000 List. Financials TTD has grown its revenues for 8 consecutive years. And substantially, at that. The firm generated $203 million in revenue in 2016, and in 2021 it did over $1.19 billion in revenue. But that’s not all. The firm has managed to improve its gross margin to levels never seen before. In 2021 the company reported a gross margin of 81.5% In 2021 the firm had a positive free cash flow of $314 million. TTD has a current ratio of 1.71x. Its highly liquid assets are 1.71x greater than its short-term liabilities. It has a quick ratio of 1.65x, which means its highly liquid assets are 1.65X greater than its short-term liabilities. The capital structure for TTD is as follows: total debt of $284 million and cash upwards of $958.78 and a market cap of approximately $23.7B Valuation TTD has a price-to-sales ratio of 13.82x, which is significantly higher than the sector median. The firm has a P/E Non-GAAP of 48.85x, which is well above the sector median of 18.21x. While valuations may read high for TTD, it really shines in the growth department. The company has seen its revenues grow 43.11%, much better than the sector median of 19.67%. And it does generate positive cash flow. Our Opinion - 5/10 Despite its rapid growth over the years and its excellent profit margin, TTD is still considered an expensive stock. Stocks with P/E above 50 are just not going to do well in this current environment. Even though shares are down 50% YTD, it doesn’t mean they can’t go lower. And unless sentiment changes, we believe your money can be spent in better places. That said, if shares get cut in half from here, then we have something worthwhile. [We want to hear from you! Let us know your thoughts by clicking here]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [allow us on your list](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](#). Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](