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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Trade Desk, Inc. (XNAS:TTD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TTD
Name:
THE TRADE DESK, INC. (XNAS:TTD)
Sector:
136.18M
Industry:
Software�Application
CEO:
Mr. Jeffrey Green
Total Employees:
1,967
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -81.61% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE TRADE DESK, INC.(TTD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
61.27
One Month Price Target:
$61.93
Six Month Price Target :
$65.24
Likely Price in One Year's Time:
Ticker:
$69.21
Likely Trading Range Today Under (Normal Volatility)
$60.91
Price Upper limit ($) :
$61.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$55.15
This week:
$47.59
This month :
$33.9
Other Primary facts
Market Cap:
29.31B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
488.26M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
36.22%
-25.98%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$89.63
$76.39
$32.91
$46.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$72.08
Buy Put:
Sell Put:
$69.25
$50.43
$53.29
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TTD
Sharpe Ratio:
4.89%
Comparison:
TTD, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 407.23% higher than the industry
& ratio is 114.50% higher than the market/S&P 500 average
Average Returns/Yield of
TTD
Daily returns:
0.25%
Weekly returns:
1.26%
Monthly returns:
5.05%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 510.15% above industry average
Classification:
TTD, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
TTD has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.99%
Weekly Volatility:
11.15%
Monthly Volatility:
22.30%
Yearly Volatility:
77.24%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.80%
Volatility in last five trading days has been -83.90% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.99%
Weekly VaR:
-22.33%
Monthly VaR:
-44.67%
How Much Can the price of
TTD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-37%
Worst case (decline):
>85%
This translates to price declining to:
$38.85
This translates to price declining to:
$9.19
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TTD is a 215.25% riskier investment compared to the market/S&P 500 & is 170.07% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 38.71% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TTD
Beta in relation to market/S&P 500--1.93
Expected beta in 1 year's time:
1.35
Expected beta in 3 year's time:
1.909
Unlevered (debt free) Beta:
1.685
Beta in relation to Nasdaq (XNAS):
1.8
Beta in relation to all global stocks::
1.055
Beta Comparison & Analysis
Beta of competitors/peers::
1.149
Beta is 67.94% higher than peers
Average Industry Beta:
1.335
Beta is 44.44% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
24.48%
Sustainable growth rate is -21.31% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.443
Alpha is -1974.96% below industry average alpha yield
Alpha is 2818% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TTD
Equity cost of capital:
0.164
Equity cost of capital is 33.06% above industry mean WACC
Unlevered (without debt) cost of capital:
14.29%
Before-tax cost of debt:
-0.39%
After-tax cost of debt:
-0.31%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-0.31%
WACC is 65.95% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.65
Revenue growth rate per share of (3Y):
18.14
Annual revenue growth rate is 7.48% above the industry average
EPS:
$0.20
Expected Annual growth rate of EPS (3Y):
4.84%
Expected future EPS growth rate is -82.31% lower than the Software�Application industry
Free cash flow (FCF) per share:
$0.82
-
-
Debt per share
$0.47
EBITDA per share
$0.29
Valuation Analysis Today of
TTD
P/E Ratio:
930.02
P/E Ratio of Competitors/Peers:
38.24
P/E ratio is 2331.86% higher than main peers & is 423.67% higher than the industry
Stock price/value with industry average P/E ratio: $35.52
TTD is 72.50% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
23.15
Price to sales ratio is 101.86% above the industry mean
P/B (Price to book value ratio):
18.14
Price to free cash flow: 74.91
Price to free cash flow ratio is 27.45% higher than the industry
Net income growth rate (3Y):
43.32%
Net income growth rate is -82.26% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
13.92%
Net debt to equity ratio:
-34.41%
Debt to assets ratio:
6.69%
Net debt to assets ratio:
-16.53%
Debt-to-asset ratio is -87.82% below industry average
Ability to repay debt:
Interest coverage ratio:
-130.2
Interest coverage ratio is -345.09% less than industry average
Looking forward:
Debt growth rate:
-2.68%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.547
Statistical significance of correlation:
TTD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 8.77% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.017
Covariance of price movement with the market:
-0.049
Kurtosis
8.314
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.723
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
TTD
Gross Profit Margin Ratio:
327%
Operating Profit Margin Ratio:
7.74%
Operating profit margin is -140.39% lower than the industry
Net Profit Margin Ratio:
327%
Effective Tax Rate:
-4.05%
Effective tax rate is -115.35% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.10%
Return on equity (ROE) is -146.61% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.93%
Return on assets (ROA) is -176.25% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.91
Current ratio is -36.18% below industry average
Cash Conversion Cycle (days):
-3906.2
Cash conversion cycle is -4221.92% below industry average
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
124.25%
In-depth Efficiency Analysis
Revenue generated per employee:
656.8K
Each employee generates 90% more revenue than industry average revenue per employee
EBITDA generated per employee:
71.2K
Each employee generates 563% more EBITDA than industry average revenue per employee
Profit generated per employee:
51.1K
Each employee generates -393% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
69.2K
Each employee generates -991% less free cash flow than industry average revenue per employee
Assets/Capital per employee
242.7K
Each employee generates -991% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 35.69%
Growth rate in R&D investment/expenditure is 2234.55% higher than the industry
Competitors/Peer firms of
TTD
CROWDSTRIKE HOLDINGS, INC. (XNAS:CRWD)
Telefonaktiebolaget LM Ericsson (XNAS:ERIC)
ZSCALER, INC. (XNAS:ZS)
MICROCHIP TECHNOLOGY INCORPORATED (XNAS:MCHP)
CADENCE DESIGN SYSTEMS, INC. (XNAS:CDNS)
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION (XNAS:CTSH)
XILINX, INC. (XNAS:XLNX)
GLOBALFOUNDRIES INC. (XNAS:GFS)
ANSYS, INC. (XNAS:ANSS)
Current Analyst Ratings
Strong buy�8%
Buy�25%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.29B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
234.94M
1.06B
244.22M
448.62M
712.84M
264.22M
-
957.06M
-
- 1076.00K
44.56M
140.09M
99.98M
100.52M
96.61M
- 3912.00K
100.52M
Statement of Cash Flow
Date:
Period:
12.35M
Differed Income Tax :
- 5304.00K
Stock Based Compensation :
124.90M
Change in Working Capital :
16.61M
Accounts Receivables:
259.48M
Other Working Capital:
-
Other Non-Cash Items:
12.24M
Net Cash Provided by Operating Activities:
146.19M
Investments in PP&E:
- 8401.00K
Net Acquisitions:
-
Purchases of Investments:
- 121221.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
844.22M
260.35M
1.10B
1.76B
-
89.78M
2.96B
359.63M
-
-
-
73.55M
44.20M
477.38M
-
3.43B
1.41B
47.23M
-
-
92.90M
1.55B
229.49M
8.33M
237.82M
-
1.78B
-
597.53M
-
-
March 31, 2022 at 6:00:00 AM
1.19B
1.65B
3.43B
-
276.72M
- 567508.0K
64.13M
- 1614.00K
- 67103.00K
-
-
-
-
10.98M
10.98M
-
90.07M
844.22M
754.15M
146.19M
- 10015.00K
136.18M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TTD
2023
2024
2025
2026
2027
$69.56
$106.20
$119.97
$135.52
$153.08