Trade Desk (NASDAQ: TTD) stock has been among the best performers so far this year amid investors’ confidence in its programmatic advertising business model. The shares extended gains by 12% to an all-time high of $730 in post-market trading after the company released third-quarter results.
The provider of a cloud-based technology platform for ad buyers topped third-quarter revenue and earnings estimates by a wide of $34 million and $0.82 per share. The company says consumers shift towards online platforms for shopping and watching movies has substantially increased demand for online ads. And, this shift has been resulting in massive revenue and profits for Trade Desk.
Stronger ad revenue supports TradeDesk stock
Trade Desk stock price soared almost 140% since the beginning of this year amid robust growth in ad revenue. Its third-quarter ad revenue came in at $216 million, up 34% from the past year period.
The company says advertising spend on connected TVs grew 100% year over year in the third quarter, while spending on audio and mobile video grew 70%. It has also reported a strong customer retention rate of 95%.
“As advertisers come under pressure to prove the ROI of their campaigns, to take advantage of the mass consumer shift to streaming TV, and to consider alternatives to user-generated content, our investments in these areas are paying off,” CEO Jeff Green said.
Rosy outlook and higher price targets back bullish sentiments
The company anticipates sustainable growth in financial numbers in the coming quarters. It anticipates fourth-quarter revenue in the range of $290 million, in line with analyst’s expectations of $280 million. The adjusted EBITDA is likely to stand around $115 million.
Needham has set Buy ratings, calling the stock a top pick for 2020. The firm has provided a price target of $750, with a bullish outlook for revenue and earnings growth.