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Following recent comments from the New York Federal Reserve President, anticipation of a potential December interest rate cut has grown, benefiting growth-focused software companies including The Trade Desk.
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This shift in expectations has bolstered sentiment in the software sector, highlighting increased investor optimism about earnings potential amid lower borrowing costs.
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We’ll examine how interest rate cut hopes may shape The Trade Desk’s outlook given its role in growth-oriented digital advertising.
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To be a shareholder in The Trade Desk, you need to believe in the ongoing shift of ad dollars from traditional to digital, especially connected TV (CTV), and the company’s ability to win market share with its AI-driven platform. While renewed hopes for a December interest rate cut have improved near-term sentiment for growth stocks like The Trade Desk, the biggest short-term catalyst, further adoption of CTV and the Kokai platform, remains the same. The largest risk continues to be revenue concentration among major global brands amid volatile macro conditions, and this news does not materially change that outlook.
One recent announcement particularly relevant here is the mandated migration of advertisers to the Kokai platform. As Trade Desk phases out its older Solimar interface, some buyers have reported friction and operational issues. This transition is highly significant in the context of company catalysts, as broad adoption and satisfaction with Kokai is key to driving future revenue growth and platform efficiency.
However, investors should not overlook the risk that if major brands reduce ad spend or encounter disruptions on the new platform…
Read the full narrative on Trade Desk (it’s free!)
Trade Desk’s narrative projects $4.3 billion in revenue and $823.2 million in earnings by 2028. This requires 17.1% yearly revenue growth and a $406 million earnings increase from current earnings of $417.2 million.
Uncover how Trade Desk’s forecasts yield a $68.97 fair value, a 74% upside to its current price.
Fair value estimates from 38 members of the Simply Wall St Community for Trade Desk range widely from US$39.48 to US$111.31 per share. While future CTV growth is a major catalyst, sharply different investor opinions reflect uncertainty about how competition and evolving advertiser needs could influence long-term revenue and margins.
Explore 38 other fair value estimates on Trade Desk – why the stock might be worth over 2x more than the current price!
