The Trade Desk, Inc.
The Trade Desk, Inc. Fundamental Analysis
The Trade Desk, Inc. (TTD) shows moderate financial fundamentals with a PE ratio of 29.40, profit margin of 15.31%, and ROE of 16.89%. The company generates $2.9B in annual revenue with strong year-over-year growth of 18.47%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 75.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TTD's fundamental strength across five key dimensions:
Efficiency Score
WeakTTD struggles to generate sufficient returns from assets.
Valuation Score
WeakTTD trades at a premium to fair value.
Growth Score
ExcellentTTD delivers strong and consistent growth momentum.
Financial Health Score
ExcellentTTD maintains a strong and stable balance sheet.
Profitability Score
ExcellentTTD achieves industry-leading margins.
Key Financial Metrics
Is TTD Expensive or Cheap?
P/E Ratio
TTD trades at 29.40 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TTD's PEG of 13.08 indicates potential overvaluation.
Price to Book
The market values The Trade Desk, Inc. at 5.25 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 17.84 times EBITDA. This signals the market has high growth expectations.
How Well Does TTD Make Money?
Net Profit Margin
For every $100 in sales, The Trade Desk, Inc. keeps $15.31 as profit after all expenses.
Operating Margin
Core operations generate 20.35 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.89 in profit for every $100 of shareholder equity.
ROA
The Trade Desk, Inc. generates $7.20 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Trade Desk, Inc. generates strong operating cash flow of $984.41M, reflecting robust business health.
Free Cash Flow
The Trade Desk, Inc. generates strong free cash flow of $780.72M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.64 in free cash annually.
FCF Yield
TTD converts 6.08% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
29.40
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
13.08
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.25
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.46
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How TTD Stacks Against Its Sector Peers
| Metric | TTD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 29.40 | 34.43 | Better (Cheaper) |
| ROE | 16.89% | 1135.00% | Weak |
| Net Margin | 15.31% | -134663.00% (disorted) | Strong |
| Debt/Equity | 0.18 | 7.92 | Strong (Low Leverage) |
| Current Ratio | 1.61 | 5.77 | Neutral |
| ROA | 7.20% | -310462.00% (disorted) | Weak |
TTD outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Trade Desk, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
234.07%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
76.42%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
136.33%
Industry Style: Growth, Innovation, High Beta
High Growth