Shares of Trade Desk, the advertising-technology company, experienced a significant surge on Friday due to better-than-expected guidance. In premarket trading, Trade Desk saw an 18% increase, reaching $89.60.

According to FactSet, Trade Desk reported fourth-quarter adjusted per-share earnings of 41 cents, which met Wall Street’s forecasts. Additionally, its revenue of $606 million surpassed estimates of $582.1 million.

Looking ahead, Trade Desk anticipates a fruitful first fiscal quarter. It expects to generate revenue of at least $478 million and achieve adjusted earnings before interest, taxes, depreciation, and amortization of approximately $130 million. These projections exceed the analysts’ predictions of $469 million and $125 million, respectively.

This positive report drew praise from Truist Securities analysts, led by Youssef Squali. In a research report, they applauded Trade Desk’s exceptional execution in the face of a volatile digital advertising environment. They also noted the company’s continued market share gains.

Truist highlighted Connected TV as a key driver for Trade Desk’s success. With rapid adoption in the US and international markets, Connected TV receives growing inventory from ad-supported streaming services. Moreover, it benefits from Retail Media budgets transitioning to the platform and increased political and Olympics ad spend expected in 2024. Connected TV refers to streaming content watched on televisions or mobile devices.

In light of these favorable developments, Truist maintained its Buy rating and raised its price target from $80 to $100.

Trade Desk: Navigating the Changing Landscape of Digital Advertising

Oppenheimer Analysts Bullish on Trade Desk’s Accelerating Ad Demand

In a recent report, Oppenheimer analysts led by Jason Helfstein expressed their optimism regarding the “accelerating ad demand” for Trade Desk. They maintained their Outperform rating and increased their price target from $85 to $105.

The Impact of Google’s Phasing Out of Third-Party Cookies

Noted analysts Laura Martin and Dan Medina from Needham shed light on one crucial aspect discussed in the report – the challenge posed to digital advertisers by Google’s initiative to phase out third-party cookies by the second half of this year. The reliance on such information for tracking internet activity has long been a staple for advertisers.

United ID 2.0: Trade Desk’s Alternative to Third-Party Cookies

Trade Desk, however, presents a viable solution to this challenge. The company has developed an alternative to third-party cookies called United ID 2.0. According to Trade Desk, multiple streaming services have already adopted this alternative tracking method. Needham analysts believe that Trade Desk’s efforts to build a new identity and authentication system for the open internet will be a significant growth driver by 2024, as traditional cookies crumble. Consequently, they maintained their Buy rating and set a price target of $100.

A Note of Caution from Benchmark Analyst Mark Zgutowicz

While acknowledging Trade Desk’s strong quarter, Benchmark analyst Mark Zgutowicz expressed concerns about potential disruptions in the second half of the year due to the Chrome cookie deprecation. Despite maintaining his Sell rating, Zgutowicz raised his price target to $42 from $32.

In conclusion, Trade Desk continues to navigate through the changing landscape of digital advertising with confidence, thanks to its alternative tracking method – United ID 2.0. While some analysts remain cautious, others are bullish on the company’s future prospects, citing increasing ad demand and the need for a new identity system in the evolving digital ecosystem.

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