For those of us still holding TTD, they just announced some very good earnings results. The stock is up 21% pre-market.
Revenue of $301.1M (+39.3% Y/Y) beats by $17.17M.
Q3 Non-GAAP EPS of $0.18 beats by $0.03;
They are now at a $1.2B run rate. This is quadruple the $300M revenue TTD realized back in 2018 when I first bought my shares, thanks to this board. They are a revenue compounding machine.
What I find remarkable about this result is that TTD was able to buck the negative consequences of Apple’s IDFA and supply chain issues that impacted advertisers like SNAP and FB. This tells me that TTD’s own Unified ID standard is gaining traction and is able to mitigate the impact of Google phasing out cookies.
Thanks Ron; I’m one of those long term holders. I’m looking forward to the conference call. The press release says that in several instances that the Unified ID approach was more efficient (faster) with a higher conversion rate. I would like to see more discus son/color on this but it looks like this could be a game changer. Also they are using an AI engine KOA to help customers optimize their spend. Will also help advertisers to grow their audience w/o losing control of it. I think as time goes on we are going to see acceleration in clients/revenues/profits.
While it is nice to see the share price bump today, I will be moving on from The Trade Desk come January 1st. If a portfolio consists of 12-15 stocks then perhaps TTD works, but even with today’s surge its only up 10% YTD. Here are the YTD returns of some other companies commonly discussed here:
UPST: 659%
NET: 170%
DDOG: 110%
GLBE: 100%+ since IPO earlier this year
MNDY: 100%+ sine IPO earlier this year
ZS: 75%
ZI:60%
CRWD: 39%
DOCU: 22%
At <40% yoy revenue gains, The Trade Desk is just not going to be the needle mover that a concentrated portfolio demands. I love their primary thesis of selling ads to an open internet, but having owned TTD myself since Dec 2018, those inroads aren’t happening at the pace required for a hypergrowth portfolio.
My portfolio is currently up 52% this year, with my 15% TTD allocation being the primary reason for underperformance compared to many here. Of all the lessons I learned in 2021 TTD will be the most costly, but the most beneficial in attempting to do better next year.
I am also a holder of TTD so I am delighted by this jump in pricing. But to put this in perspective, all this represents is a return to the share cost from last December.
I am in a similar situation as you. I had an allocation above 20% in TTD until early this year with my 2018/2019 purchases.
It really dragged my portfolio performance even though I was also in DDOG, NET, CRWD for more than a year.
The best decision I made this year was to trim the stock down to 10% and invested all the proceeds into UPST when it was under $120. This drastically improved my YTD portfolio performance from hovering around 20% during the summer to 50% YTD
I think strategically I will be treating high-conviction but slower/declining growth stocks like TTD as a “Cash holding” rather than holding actual cash. This is also the methodology I applied to CRWD, reducing the position size and investing it into DDOG. I now think of TTD and possibly CRWD as a better-than-holding-cash type of position that I would be willing to immediately reallocate when an opportunity arises.
Good luck picking the top or the next winner to replace TTD. Stocks go through cycles and the biggest winners and life-changers underperform and outperform during different time periods. The thesis is improving and they have a massive TAM with the market clearly moving to their model. Their technology advantage, leadership and profitabilty this early in a large developing cycle is potentially a life changer. Don’t be fooled by one year movements of stock prices, if the thesis is still intact and in this case improving versus their competitors no need to rush out and sell.
Fantastic report with much to like and one of the strongest leadership teams in the space.
At <40% yoy revenue gains, The Trade Desk is just not going to be the needle mover that a concentrated portfolio demands. I love their primary thesis of selling ads to an open internet, but having owned TTD myself since Dec 2018, those inroads aren’t happening at the pace required for a hypergrowth portfolio.
My portfolio is currently up 52% this year, with my 15% TTD allocation being the primary reason for underperformance compared to many here. Of all the lessons I learned in 2021 TTD will be the most costly, but the most beneficial in attempting to do better next year. – Brandon
Just to provide a different perspective, I’ll note a couple things:
TTD appears to have a significant role in ad monetization, with a customer-beneficial moat that has been discussed many times on this board. Given the giant TAM in front of them… and the moat… I’m willing to keep them as part of my 13 stock portfolio.
As Brandon noted in his post, it’s a 40% revenue gainer but has just had a 10% YTD gain. I look at that small gain as a plus… not for this year necessarily… but for the future. What this data point tells me is that we’ve seen some good valuation compression and it’s likely we’ll see greater share price growth in the future… more in line with sales and PROFIT gains.
Yes, I used the P word. TTD IS putting up accounting profits, along with robust positive cash flow. That’s always a plus.
Is TTD likely to be a leader in my portfolio? Probably not, but I appreciate THEIR moat in the light that some of my companies might not have quite so deep/wide a moat. Instead of being an anchor… I view it as more of an “enhanced high probability” gainer. (“Enhanced” due to a durable moat).
Disclosure: TTD just has a 3% allocation, down substantially from the 20%-30% share it had when it was running up from $4 to $60+. Why did I reduce? My obvious answer (considering what board we’re on), is that I sold to buy “better stuff”. My portfolio changes significantly over time as I shift assets to take advantage of what I perceive as “better stuff”. Right now, the BEST stuff happens to be a little company called Upstart with around 50% of my portfolio (that’s a rough guess since I haven’t updated my call option valuations, but it serves to indicate that I have a bunch of it).
Anyhow… I just wanted to express my thought that there can be reasons to retain a LAGGARD that is ONLY growing at 40%.
Rob
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
And let’s not forget management. Jeff Green, founder and CEO, is one of the pioneers in demand-size, programmatic advertising (his former company, AdECN, was acquired by Microsoft) and has really been a visionary when it comes to connected TV. It’s why I won’t sell Trade Desk. Same reason I stick with Twilio and NVIDIA. Leadership.
I’ve never posted here before. Thank you Saul for the knowledge base and making me, a lousy investor into a better one. That’s why I’m actually posting about The Trade Desk. I want to relate my experience listening and not listening to voices on this board. First I have to say I’m not technical, I’m an artist and admire the brilliance of a lot of people who post here: Bear, Stocknovice. Muji, Rafflesusersname and a ton more, TTD was a hot stock on this board everybody was all in and I think in 2019 Saul soured on it, Many concurred and sold out and the Trade Desk was sent out to the pasture and not talked about that much. I sold too but half my position. I think the following earnings TTD shot up, not unlike today, And I kicked myself for listening to the majority and selling and bought back the shares I had sold out. I’ve more or less held them till now, and that’s the reason I’m writing this, On Friday a number of posts all agreed TTD was “doomed”. And again I got spooked and placed an order to sell all my TTD. Thankfully, because we have TMF I came to my senses after a great live video report I cancelled the sell order. To those who are impatient, I’m up 285% TTD since spring 2019. Maybe there are better places to be invested like UPST (I’m in too). But a part of good investing is keeping core positions (TMF1000)and not selling when your have a great company. Although that isn’t exactly the philosophy of this board, it is something to keep in mind. I hear a lot of great investors say I sold too soon. A great company sold at 10x that is now 100x. I’m not advocating hanging in to ZM or TWLO, But there is a reason TMF is so bullish on TTD.
Syd
I wanted to thank everyone who commented, many of whom are bullish on The Trade Desk. I have zero problem with those viewpoints as I too allocated a 10-15% position myself for most of the past three years. As originally stated, if a person is holding 12-15 companies then there might very well be a spot for this company. It is certainly a solid business with great leadership.
However, when looking at the board heavyweights, I see they are outperforming me year after year and not one of them owns The Trade Desk. Thats not me trying to copy them, rather me trying to learn from them. My portfolio, even at +145% last year and +52% this year, has lagged behind so many here, and I need to be honest with myself as to why.
However, when looking at the board heavyweights, I see they are outperforming me year after year and not one of them owns The Trade Desk. Thats not me trying to copy them, rather me trying to learn from them. My portfolio, even at +145% last year and +52% this year, has lagged behind so many here, and I need to be honest with myself as to why. – Brandon
There is more diversity in high performing portfolios than you may think. I had 154% last year. And while I haven’t kept long term records, I moved from near-bankruptcy (zero net worth) to early retirement in 17 years (7 figure net worth). That isn’t accomplished by holding laggards.
Anyway, I’d encourage you to give consideration to more companies than the few mentioned by the leaders in posting. You can do pretty well with the “outliers”.
Another example besides TTD is SE. Some of us hold it on this board (do a search for posts)… but it hasn’t received a lot of enthusiasm. My SE position is worth 10 times what I bought it for 16 months ago. A pretty good return! By my standards anyway…
Yeah… another laggard story…
Rob
up 85% YTD
Rule Breaker Home Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
that is ONLY growing at 40%.