Vladyslav Koptiev @AtlasCapital: "𝗔𝗱 𝗗𝗼𝗹𝗹𝗮𝗿𝘀 𝗦𝗵𝗶𝗳𝘁. 𝗗𝗼𝗲𝘀 $TTD..."

Malta

Edited

𝗔𝗱 𝗗𝗼𝗹𝗹𝗮𝗿𝘀 𝗦𝗵𝗶𝗳𝘁. 𝗗𝗼𝗲𝘀 $TTD (Trade Desk Inc) 𝗖𝗮𝗽𝘁𝘂𝗿𝗲 𝗧𝗵𝗲𝗺 𝗔𝗹𝗹? Long-term TTD shareholders have been left with empty hands: 0% average return in 5 years, -11% for 3 years, and a whopping 60% loss in 1 year. There are primarily 2 possible reasons for such a poor performance and for P/E multiple compression: 1) shareholders adjusting their expectations about growth and ROIC, which were previously overoptimistic (previously wrong about company prospects, now moving into a more reasonable range); 2) shareholders went too far with adjusting their expectations, making a stock temporarily out of favor due to underestimated future prospects (currently wrong about the company’s prospects). A good point of entry will obviously be the second case, but determining which one applies to this specific company is not an easy task. Let's try to figure it out. Let’s assume that TradeDesk can sustain high ROIC and even slightly improve it to 20%, which is optimistic but possible (for example, R&D expense can go down as the company achieves lower but stable growth, and margins improve). In terms of growth, the Trade Desk is likely to grow revenue at a CAGR in the ballpark of 15-20% over the next 5 years — perhaps closer to the lower end of that range as growth moderates. But for the sake of our analysis, let’s factor in a more optimistic scenario and assume that growth will be 20% for the next 15 years. For these fundamentals and assuming that the average ROIC will equalize with cost of capital after 15 years, fair P/E is 50. Now, look at the relative valuation expressed as earnings yield – it’s 2% or a reversed 50 P/E! Meaning the multiple that the company is trading is absolutely granted! Based on this, I 𝗰𝗼𝗻𝗰𝗹𝘂𝗱𝗲 that TTD appears only modestly undervalued, rather than deeply undervalued. _____________________________________________ 💰 𝙈𝙮 𝙥𝙤𝙧𝙩𝙛𝙤𝙡𝙞𝙤 𝙙𝙚𝙡𝙞𝙫𝙚𝙧𝙚𝙙 𝟮3% 𝙖𝙫𝙚𝙧𝙖𝙜𝙚 𝙖𝙣𝙣𝙪𝙖𝙡 𝙧𝙚𝙩𝙪𝙧𝙣 𝙨𝙞𝙣𝙘𝙚 𝟮𝟬𝟭𝟴. 📌 𝗖𝗼𝗽𝘆 𝗔𝘁𝗹𝗮𝘀𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝘁𝗼𝗱𝗮𝘆 𝘁𝗼 𝗯𝗲𝗻𝗲𝗳𝗶𝘁 𝗳𝗿𝗼𝗺 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀-𝗯𝗮𝘀𝗲𝗱 𝗱𝘆𝗻𝗮𝗺𝗶𝗰 𝗮𝘀𝘀𝗲𝘁 𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻. etoro.tw/3AsaBiH ✅ 💼 𝗟𝗲𝘁 𝘁𝗵𝗲 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗺𝗮𝗻𝗮𝗴𝗲𝗿 𝗵𝗮𝗻𝗱𝗹𝗲 𝘁𝗵𝗲 𝘄𝗼𝗿𝗸, 𝘄𝗵𝗶𝗹𝘀𝘁 𝘆𝗼𝘂 𝗲𝗻𝗷𝗼𝘆 𝗹𝗶𝗳𝗲. *Past performance does not guarantee future results $SPX500 $BTC $VGT (Vanguard Information Technology) $GOLD

5 Mentioned

TTD

Trade Desk Inc

SPX500

BTC

Bitcoin

VGT

Vanguard Information Technology

GOLD

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