由 jpichiban Sat, 22 Feb 2025 12:53:59 GMT
This is one of the stock profiles of StockStory , a fintech investing company seeking to identify long-term ideas that beat the market using an AI-driven approach. Previously StockStory covered Cloudflare (NET) and Howmet Aerospace (HWM) . As the world digitizes, buying advertising inventory is moving from power lunches to programmatic platforms that leverage data and automation. The Trade Desk (NASDAQ:TTD) is the clear leader in this space, allowing brands to target custom audiences, place ads in relevant media, and measure return on spend. Key Highlights: TTD is the best and largest independent platform for ad buyers. This is why revenue increased 12x from 2016 to 2024. New and expanded partnerships, especially a recent one with Netflix, will power growth for years to come. From there, the company’s low variable cost base will mean explosive margin increases. Co-Founder Jeff Green remains at the helm as TTD’s Chairman and CEO roughly 25 years after starting the company. He’s adamant about making decisions for the next 100 years, and we love this long-term focus. The Trade Desk revolutionized the way digital ad campaigns are bought, executed, and measured. The company hasn’t just pioneered and dominated the market serving online ad buyers, but it has done so consistently and profitably. For this, the market has rewarded TTD’s stock with over a 25x return since the stock closed on its first day of trading in late 2016. For years, we’ve admired the secular tailwinds, the TTD platform, and the company’s leadership from afar, searching for a compelling entry point. We now have one coupled with two attractive short-term tailwinds. First, the confluence of recent partnerships gives the brand a big boost in street cred and provides major tailwinds to revenue. Second, the launch of a connected TV (CTV) operating system removed major frictions from CTV advertising and the incremental dollars flowing into that market will benefit TTD for many years to come. Buying the Dip TTD saw its stock drop over 30% after Q4 2024 earnings last week. The company missed Q4 2024 revenue and expectations, with Q1 2025 guidance also falling short. This was largely due to internal reorganizations to sales and engineering teams that temporarily disrupted execution. Specifically, the company restructured client-facing teams to better serve agency and brand clients while reorganizing engineering into 100 “scrum teams” to speed up development. However, these changes delayed the launch of Kokai, for example, TTD’s AI-powered advertising tool. CEO Jeff Green and the rest of management remain steadfast that nothing is amiss, citing a stable macro environment, strong digital ad market growth, and TTD’s leadership as the top independent DSP. While this move is notable, TTD has a history of sharp short-term swings but strong long-term gains. A similar 30+% drop after Q3 2023 was followed by a 50% rebound since, outperforming the S & P 500. TTD 1Y mountain TTD, 1-year With this and the company’s business quality in mind, we are recommending the stock. One weak quarter and the resulting volatility doesn’t change TTD’s status as an elite business, making it a compelling long-term investment at this price. Keep reading to understand why this is such a special company. The Advertising Industry – A Brief History With the most recent quarter out of the way, let’s get into the business now! Advertising used to be a world of power suits and power lunches, as depicted in the popular TV series Mad Men . A senior exec at Omnicom (NYSE:OMC) might wine and dine the Chief Marketing Office of McDonald’s (NYSE: MCD) over lobster and a bottle of Château Palmer, schmoozing his/her company’s way into a lucrative ad-buying contract. These deals typically included fixed retainer payments plus a commission—often 15% of total ad spend. It was an opaque system. McDonald’s ads ran during primetime sitcoms, top-ten radio countdowns, and on billboards in major cities, but measuring return on investment was murky at best. Worse yet, in 2016, the Association of National Advertisers exposed widespread kickbacks between agencies and TV networks. For example, a broadcast network like CBS might offer a $5 million rebate if a client like Procter & Gamble committed $50 million in ad spend — except the agency would pocket the rebate without telling its client (and also earn its commission on the inflated $50 million instead of the true $45 million). The internet changed everything. Traditional advertising was all about reach, targeting broad demographics with little precision. Digital advertising, dominated by Alphabet (formerly Google, NASDAQ:GOOGL ) and Meta (formerly Facebook, NASDAQ:META) , introduced audience segmentation based on searches, likes, and group memberships. Suddenly, an advertiser could target people searching for “best weight loss drugs” or those in a local pickleball group. But a new conflict arose. Alphabet and Meta, known as walled gardens , controlled their own ad sales and were incentivized to inflate or at least obfuscate performance metrics — like a commission-based appliance salesman telling you that your fridge is terrible and pushing you to buy a new one (from him, of course). Beyond the walled gardens lays the open internet — websites, blogs, streaming platforms, and mobile apps—with seemingly endless ad inventory. Unlike Alphabet and Meta, these publishers didn’t force advertisers to use ad-buying proprietary tools, eliminating some conflicts of interest. But without centralized tools, buying ads and optimizing ad spend was inefficient. Lastly, traditional media was mostly premium content — professionally produced TV, movies, and music. The internet ushered in a flood of user-generated content, from posts to videos, some of which contained misinformation, explicit material, or hate speech. Alphabet and Meta have little incentive to fully ensure brand safety, leaving advertisers to fend for themselves in the chaos of the open web. The Trade Desk – A Company Overview TTD emerged from the shift toward data-driven digital advertising, offering a self-serve, cloud-based platform that helps advertisers optimize ad spend with greater transparency. As an independent demand-side platform (DSP), TTD serves only ad buyers—agencies and brands—eliminating conflicts of interest and ensuring accurate performance measurement. TTD powers programmatic advertising, replacing the manual, relationship-driven deals of the past that we detailed above. When a webpage or app loads, an unfilled ad spot is created, triggering an automated auction. DSPs like TTD analyze metadata (ad type, placement, audience) and bid in real time, with the highest bidder winning the spot—all in milliseconds. If you prefer a video explaining programmatic advertising, here’s a great one that’s under two minutes. Beyond automation, TTD offers key value-add features: Data-driven targeting – Combines first-party, third-party, and contextual data to refine audience segmentation based on demographics, behavior, purchase history, and real-time intent. Real-time bidding – Enables dynamic ad buying across desktop, mobile, digital audio, and connected TV (CTV), ensuring advertisers pay only for high-value impressions. Performance analytics – Tracks impressions, clicks, conversions, and return on ad spend for continuous optimization. AI-powered decisioning – TTD’s Koa and Kokai AI products dynamically adjust budgets, audience targeting, and campaign strategies using real-time data to maximize efficiency. Unlike Alphabet and Meta, which sell ads within their own walled gardens and don’t let customers own the data or use third-party tools for analytics and measurement, TTD gives advertisers access to the broader open internet—websites, streaming platforms, and apps. This independence allows greater transparency, control, and flexibility in ad spend. While the walled gardens have incentives to report favorable results, TTD is aligned solely with ad b uyers, ensuring unbiased measurement and optimization. Competitive Landscape TTD is the leading independent DSP, and its data-driven, cloud-first approach meets customers where technology is going. Still, the company doesn’t just operate in a vacuum and competition is evolving. We think about competition in two categories. Walled gardens (Alphabet, Meta, TikTok) Other DSP competitors The Walled Gardens When it comes to digital ad revenue, Alphabet and Meta are the #1 and #2 players globally. TikTok has emerged in recent years to establish a major presence in social media. As mentioned, these companies are referred to as walled gardens because they exclusively control the platforms on which you buy Google Search, YouTube, Facebook, Instagram, and TikTok ad inventory. User data to target and assess ad campaigns is limited and belongs to these companies, and the walled gardens prohibit use of third-party tools and data for execution and measurement. On the one hand, most companies must allocate some ad dollars to the walled gardens simply because of how many people worldwide engage with their apps and web properties. On the other hand, there is lack of transparency and misalignment of incentives when buying from the walled gardens because they simply want to sell more ads, not necessarily tell customers that certain spend on the platform may not be worth it. The Other DSPs The independent DSP landscape is fairly fragmented, with TTD as the clear leader (measure by ad spend on the platform and revenue). This is a market where network effects matter, so we think that TTD’s lead will mean continually more customers, more data, and more partnerships, leading to an even larger lead. Still, we keep a close eye on two independent DSP competitors in particular. Amazon DSP Over the last decade, Amazon (NASDAQ:AMZN) has been leveraging its supremacy in e-commerce to grow its advertising business. Amazon DSP is part of this effort and grants customers access to ad inventory on Amazon-owned properties (amazon.com, Twitch, Fire TV, etc.), making it part walled garden. Amazon DSP offers first-party, proprietary purchase data and shopping insights for audience segmentation and targeting purposes, making it highly attractive for retail, CPG, and performance marketers. Amazon DSP is also expanding third-party inventory, turning it from more of a walled garden into a direct competitor with TTD. This is a big move in the industry, but we’re confident that the market is sufficiently large and TTD’s independence (Amazon competes with roughly half of the companies in the S & P 500) will sufficiently insulate TTD. Xandr Invest Formerly a part of telecom giant AT & T (NYSE:T) , Xandr was acquired by Microsoft (NASDAQ:MSFT) in 2021. The company was somewhat mismanaged while under AT & T’s ownership, but it has always had a solid reputation in CTV and with larger enterprise customers. Microsoft wants to continue building on this CTV strength, an area where TTD is also strong, and expanding Xandr’s reach. We note that Xandr had an exclusive DSP relationship with Netflix (NASDAQ:NFLX) just as the streaming giant was ramping its ad-supported subscription tier, but that exclusivity is no more as Netflix announced a partnership with TTD in May 2024. Why We Love The Trade Desk There’s plenty to like about TTD, but we are most excited about three dynamics: the market, the company’s leadership position, and its history of elite financial performance. The Market The global advertising market is massive, currently at $900 billion and expected to exceed $1 trillion in about two years. This market is closely tied to global GDP, with ad spend fluctuating based on the economy. Of the $900 billion, $135 billion is spent on digital ads outside of search and social media—areas dominated by Google, Facebook, and TikTok. This $135 billion digital ad market has grown at 12% annually since 2016, compared to 4% for the overall market, and this outperformance is expected to con tinue as traditional media like TV and print decline. For TTD, this $135 billion represents its core addressable market. In 2016, TTD captured 2% of it, with $1 billion in gross ad spend. At the end of 2024, that grew nearly 12x to $12 billion, or 9% of the market. TTD is now the leading independent demand-side platform (DSP), with just under 10% market share. While 10% might seem low, programmatic ad buying is still in its early stages, and the market remains fragmented. On the company’s dominance, a former Roku (NASDAQ:ROKU) salesperson remarked just last week: “If you’re running programmatic, you’re running in The Trade Desk. The only clients that I worked with who were not running in The Trade Desk were those 1% of clients where I told you I was working a client directly and not an agency, and it was usually just due to lack of knowledge” Given how efficient, transparent, and data-driven programmatic ad buying is, we think that over the next decade, nearly all digital ads will be purchased in this manner. Secondly, it is still a fragmented market, with numerous DSPs out there. Many of them such as Adform, Quantcast, and StackAdapt are niche or specialized DSPs that excel in one geography or one strength such as audience insights. Market Leadership & Value Proposition We at StockStory are attracted to market leaders for obvious reasons, but we also dig into how they got into that coveted pole position. For TTD, customers love the platform because it helps them either boost brand awareness, lower costs, increase ad performance, or some combination. This helps explain the nearly 12x increase in gross spend on the TTD platform from 2016 to 2024. Marriott, HP, and Neutrogena are among TTD’s customers who have documented tangible benefits from using the platform ranging from higher brand awareness to better click-through rates. Individual customers who regularly use the TTD platform to plan, execute, and measure ad campaigns are also largely happy with their experiences and outcomes. These two quotes are quite representative of the general feedback on TTD that we’ve heard in our conversations. Director of Paid Media at a mid-market company : “What I like best about The Trade Desk is its innovative approach to programmatic advertising, empowering advertisers with cutting-edge tools and data-driven insights to achieve impactful results. Its emphasis on transparency, collaboration, and customer success sets it apart in the industry. It is a huge learning curve but the implementation has been seamless with the help of our customer account team. Our team is in the platform everyday.” Marketing & Advertising employee in Gaming & Casinos : “Simplicity to self serve and UI friendliness. The platform is made so a user can find its way around and accomplish things very easy. At the same time, if you are an experienced media buyer, you have a lot of different advanced options to support your needs. Customer support and account management teams are super helpful and very quick to respond and address all issues.” Elite Financials We previously mentioned the nearly 12x increase in spend on the TTD platform from 2016 to 2024. Because TTD’s take rate or cut of this spend has stayed stable over that time, the company’s revenue has also grown roughly 12x. A stable take rate is an underappreciated dynamic that helps us sleep better at night. It shows that TTD hasn’t faced pricing pressure over the long term from either heightened competition or a deflationary product. For example, broadband internet is generally deflationary, forcing providers to increase volumes (connected households) faster than prices decrease since it is a competitive market where the cost to deliver the service falls as technology improves. It is a treadmill we’d rather avoid in our investments. Topline growth is important, but we also value profits and unit economics. TTD, with its consistent 80+% gross margins and positive operating profits every year since 2014, impresses us. Oh yeah, and we’re talking about GAAP gross and operating margins, not the adjusted numbers that many software companies spotlight so they can exclude stock-based compensation, which we consider a real (although non-cash) expense. Said differently, if you don’t pay SBC, you’d be paying cash salaries and bonuses instead. This translates into rock-solid cash generation. TTD will have achieved five straight years of 25+% free cash flow margins. Software investors like to look at the ‘Rule of 40′, which is revenue growth plus free cash flow margin. Anything above 40 is deemed a very good business. TTD hovers around 50%. Why Is Now The Time To Buy? It’s always a good time to invest in a high-quality company like TTD if you’re holding for multiple years (we prefer three to five). Our backtests show business quality outweighs entry price in driving market outperformance, so don’t overthink valuation timing. Holding that guiding principal aside, it’s a good time to buy TTD due to two big upcoming revenue tailwinds: New and expanded partnerships with big names in content and advertising A recently-announced a CTV operating system (OS) Partnerships Any single partnership may seem small, but TTD’s recent deals are significant in aggregate: New partnershipsMarch 2024 – NBCUniversal (NASDAQ:CMCSA) enabled programmatic ad sales for the Paris Olympics, marking its first automated Olympic ad inventory.May 2024 – Netflix (NASDAQ:NFLX) ended its exclusive DSP deal with Xandr and brought TTD on board as a DSP partner to support its growing ad business . October 2024 – Spotify (NYSE:SPOT) launched its own ad exchange and named TTD as its first DSP partner for video ads, with plans to expand to audio. Expanded partnershipsJune 2024 – Fox (NASDAQ:FOXA) broadened its TTD deal to include more premium content and improved ad measurement.January 2025 – Disney (NYSE:DIS) expanded its programmatic capabilities with TTD, enabling real-time purchases of live sports and events ad inventory. These partnerships greatly enhance TTD’s brand and validate its approach. The Netflix deal is particularly exciting given the company’s dominance in streaming. We estimate Netflix’s ad revenue could grow from under $1B in 2024 to well over $3B in 2026. If TTD captures 20% of the ad spend on Netflix’s platform and maintains its 20% take rate, it could add 4-5 percentage points to TTD’s 2026 growth—potentially shifting from decelerating to accelerating revenue, which the market rewards handsomely. A New CTV OS Streaming and CTV are the future. Just compare Charter’s and Netflix’s five-year stock performances. Both companies are dominant in their industries and feature very strong, astute leadership. The big difference is that Charter largely provides linear TV connections to households in a traditional cable package offering whereas Netflix is a streaming-only platform. CHTR NFLX 5Y mountain Charter vs. Netflix, 5 years On Nov. 20, 2024, TTD announced Ventura, a streaming TV OS aimed at solving industry challenges: Better user experience – Cross-platform content discovery, personalization, and fewer but more relevant ads. More transparent ad supply chain – Improved pricing and impression data across platforms. TTD will partner with smart TV OEMs but won’t enter the commoditized, low-margin hardware business. Unlike other TV OS providers, Ventura won’t charge licensing fees or take a share of streaming service ad revenue. This, combined with TTD’s reputation in the industry, should ensure rapid adoption. So what’s the point of Ventura, and how will TTD monetize it? We see this as TTD developing its own distribution platform (similar to how the walled gardens control their own distribution platforms). It is also a long-term play to streamline CTV advertising and cut inefficiencies, which will facilitate adoption. Here’s how a typical CTV ad is bought today: Advertiser (Nike, Burger King, etc.) wants to show a streaming ad They use a DSP like TTD to bid on ad inventory th at fits its needs The DSP buys from a Supply-Side Platform (SSP) (Magnite, PubMatic) The SSP connects to an Ad Exchange, where streaming publishers (e.g., Disney+, Hulu, Roku) list inventory The Ad Exchange links to the Publisher’s ad server Finally, the ad gets served to a viewer—but each step takes a cut of the ad spend This fragmented process enables arbitrage and fraud, driving up costs. Middlemen resell inventory at a markup, and a lack of transparency allows bad actors to misplace ads, as seen in 2022 when premium PeacockTV ads ended up on low-quality sites. With Ventura, lack of licensing fees and ad revenue shares will power adoption. From there, a simplified CTV ad supply chain means more dollars flowing into CTV—already the path of least resistance given consumer habits. While revenue impact may not be visible until late 2025, we expect it to be meaningful in 2026 and beyond. What Does The Future Hold? This quarter may have sent the stock down drastically, but we still view TTD as a continuity story. It exhibits an elite profitable growth, and a market overreaction to a single quarter doesn’t change this. We think TTD will continue to grow profitably going forward, just as it has in its history. Key drivers of TTD’s topline growth will be a mix shift to digital ad formats as eyeballs and ears continue to move from traditional formats such as linear/cable TV, print, and radio to streaming video, web and mobile app, as well as digital audio. With revenue growing at a 20+% annualized rate for the next few years, the profit potential is very exciting for TTD. Our research suggests that the company’s variable cost base is quite small, roughly 20% of total operating expenses. We show why this matters in the detailed graphic below, but in short, a higher percentage of fixed costs means higher margin potentials for fast-growing businesses. Putting it all together, we expect TTD’s revenue to grow from $2.4 billion in 2024 to $5.7 billion in 2028, a 24% annualized growth rate. Operating margin should go from 17% to roughly 30% during that period, which bakes in a level of conservatism based on the math above. Free cash flow margin will follow a similar path, reaching 35% in 2028. At the end of 2028, roughly four years from now, we expect a stock price more than double today’s price, good for an annualized return of slightly over 20%. Why Do We Believe In Company Management? We’re drawn to high-quality businesses still led by their founder(s). While somewhat dated, the most comprehensive study of the topic is from Bain & Company, which analyzed founder-led companies from 1990 to 2014. It found that founder-led public companies outperformed others by 4x. There are founder-led companies, and then there’s TTD. With co-founder and CEO/Chairman Jeff Green at the helm, TTD priced its IPO at $18 in the Fall of 2016, closed its first day at $30, and now trades at roughly $800 if we reverse the July 2021 10-for-1 stock split—Exhibit A of why we trust Green as a steward of our investment. Green, who co-founded TTD in 2009 after selling an earlier ad-tech business he founded to Microsoft, takes a long-term approach. He has repeatedly emphasized building a company to last 100 years rather than chasing short-term gains, and we admire this greatly. Internally, he’s highly respected, with a 92% Glassdoor approval rating and 78% of employees recommending TTD to a friend—compared to 80% and 69% for fells SaaS company of a similar market cap HubSpot (NYSE:HUBS) or 34% and 43% for privately-held DSP competitor MediaMath. His ownership further aligns with shareholders. Excluding options and RSUs, Green holds over 8% of TTD’s stock—worth well over $3 billion. If shares rise 25%, his net worth jumps by over $800 million. With a $1 million annual salary, his financial success and legacy are largely tied to TTD’s share price. Regarding his recent stock sale (filed Jan. 30, 2025), Green converted ~128,000 B shares into A shares, selling them for ~$15 m illion. The timing was certainly curious given the subsequent stock price drop, but we don’t think this is thesis-changing for two reasons: 128,000 shares represent less than 1% of his common ownership. He has plenty of skin left in the game The sales were part of a 10b5-1 plan, a pre-arranged trading schedule that allows executives to gain liquidity and diversify holdings—meaning Green didn’t actively time this particular sale. What Are The Key Risks And How Do We Feel About Them? The three most prominent risks associated with an investment in TTD are: Technological change Competition Valuation Technological Change Digitization of workflows and the advent of programmatic ad buying greatly disrupted the business models of ad agencies such as Omnicom (NYSE:OMC), Interpublic (NYSE:IPG), and WPP (LSE:WPP). TTD was a major beneficiary of these tectonic shifts, but we understand that another change in technology could leave TTD on the losing end. We are keeping a close eye on AI in particular, as it has the potential to upend business models, especially data-driven ones like ad buying and measurement. So far, TTD is leaning into AI. Koa, launched in 2018, automates ad buying with AI-driven predictions based on audience segmentation data and historical data on ad performance. Kokai, launched in 2023, is an improvement from Koa, using generative AI to automate entire ad campaigns, from planning to execution to measurement to applying the learnings from one campaign to the next. On a recent earnings call, TTD CEO Jeff Green didn’t mince words: “AI is the backbone of everything we do at The Trade Desk. We are leveraging it to drive better ad spend efficiency, particularly in the fast-growing CTV and retail media spaces.” Competition As mentioned, TTD broadly competes with the walled gardens as well as other DSPs. We think TTD can co-exist with the walled gardens because of their distinct value propositions. Advertisers need to run campaigns on Google Search, YouTube, Facebook, Instagram, and TikTok because of the huge audiences there. They don’t always love working with the walled gardens though, as these platforms don’t grant access to any other ad inventory, are restrictive in their data and analytics, and are not properly incentivized to promote brand safety. This dynamic is what gave TTD its start, and we continue to think its value proposition resonates. As for other DSPs, we are watching two in particular. Amazon DSP has largely operated as a walled garden, granting advertisers access to its valuable e-commerce purchase data and access to ad inventory on amazon.com, Twitch, and FireTV. It has recently started offering third-party ad inventory, though, putting it in more direct competition with TTD. On this topic, customer and industry expert interviews have some recurring themes: Amazon DSP is a real competitor TTD will compete well due to its scale, reputation as the industry standard, and user friendliness coupled with strong customer support Amazon’s advantage, like Google and Facebook, is having its own distribution platform that it controls (amazon.com site, Twitch, FireTV), but TTD’s Ventura launch will also give it a distribution platform Valuation The final risk worth discussing is valuation. At 13x forward revenue, bulls will argue that this is well below the five year average of roughly 20x, de-risking an investment. Bears will say that 13x is still a premium multiple and still higher than some solid businesses out there. Said differently, it’s still not cheap after a big move down. We argue that when adjusted for past and future financial performance, TTD is attractively-priced. Still, a high absolute multiple can lead to short-term volatility on macro events such as rate expectation changes and company events such as the next earnings report. Over a multi-year period, though, we think the company’s growth and quality will smooth out the bumps. Who Is This Investment For? Our research says that a portfolio of approxima tely 20 stocks achieves diversification while allowing investors to stay on top of the companies they own. TTD deserves a roster spot due to the secular tailwinds at its back. its business quality, and a founder-led team that has done right by shareholders over the last near-decade. Given its premium valuation, TTD is strictly an investment for the patient, long-term investor willing to hold the stock for multiple years through some volatility. We recommend making TTD a 7% position, larger than average in a 20-stock portfolio. We also suggest averaging into the position over a month or two as prices can decouple from fundamentals, especially with Q4 earnings clearly injecting some market skepticism into the stock. Closing Thoughts As we approach TTD’s ten-year anniversary as a public company, we note that it has had a magnificent run, even accounting for the recent move down. Returns aren’t tapped out, though, and we think there’s more outperformance to come, driven by consumers’ continued shift to digital media and TTD’s dominant position in the DSP market. We’d also bet that its new and expanded partnerships with some of the biggest names in streaming will result in stronger-for-longer revenue growth, justifying its premium valuation. Any further questions about TTD? Reach out to our lead analyst Anthony Lee at anthony@stockstory.org . Disclosure: Anthony Lee and some members of the StockStory team hold positions in The Trade Desk (TTD).
原文链接：https://www.cnbc.com/2025/02/22/stockstory-a-volatile-tech-stock-worth-owning-for-the-long-term-because-of-its-dominance-of-a-niche-area.html