The Trade Desk (TTD) to Report Q2 Earnings: What's in Store?

The Trade Desk TTD is set to release second-quarter 2020 results on Aug 6.

The Zacks Consensus Estimate for the top line is currently pegged at $136.2 million, indicating 14.8% decline from the year-ago quarter’s reported figure.

Moreover, the consensus mark for earnings has moved 13.9% south to 31 cents per share over the past 30 days, suggesting a 67.4% decline from the figure reported in the year-ago quarter.

The company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 43.1%.

The Trade Desk Inc. Price and EPS Surprise

The Trade Desk Inc. Price and EPS Surprise

The Trade Desk Inc. price-eps-surprise | The Trade Desk Inc. Quote

Let’s see how things shaped up prior to this announcement.

Factors to Consider

The Trade Desk’s top line in the second quarter is expected to have been affected by sluggish spending by advertisers, particularly in verticals like Travel. However, the company’s limited exposure to the Travel space, which has been significantly hit by the coronavirus outbreak, is a major positive.

However, The Trade Desk’s top line in the second quarter is expected to have benefited from the momentum in programmatic ad buying. Further, the emergence of digital content boosted the usage of the company’s inventory across all forms of connected TV.

Despite an overall bleak ad demand and spending scenario due to the coronavirus, CTV ad spending is expected to have been stable owing to heightened media consumption (amid lockdowns), thereby driving The Trade Desk’s top line in the June quarter.

Moreover, The Trade Desk’s solid partner base that includes the likes of Amazon, Disney, Spotify, Channel 4 (in England), ProSieben (in Germany), TF1 (in France), Baidu, Alibaba, Tencent (in China), TikTok and Samba TV (Australia) is noteworthy. Notably, through its partnerships, the company has been helping advertisers reach premium audiences globally.

Moreover, consistent customer retention is also expected to have perked up the company’s revenues during the quarter. The Trade Desk’s customer-retention rate has remained more than 95%, as it has for the previous 5 years.

Additionally, the bottom line is expected to reflect stringent cost control in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

The Trade Desk has an Earnings ESP of +65.06% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other companies worth considering as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle:

Cambium Networks CMBM has an Earnings ESP of +24.73% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ON Semiconductor ON has an Earnings ESP of +25.00% and is #3 Ranked.

ANGI Homeservices ANGI has an Earnings ESP of +100% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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