Key Takeaways:
- Revenue Trajectory: The Trade Desk stock is modeled to grow revenue at 17% CAGR, reflecting scaled CTV adoption and expanding global advertiser demand.
- Margin Expansion: The Trade Desk stock assumes 22% operating margins, representing sustained platform leverage and disciplined cost control.
- Price Projection: Based on normalized growth and valuation, The Trade Desk stock could reach $48 by 2027.
- Return Profile: This implies 29% total upside and a 14% annual return from the current price of $37.
The Trade Desk (TTD) is a digital advertising platform enabling data-driven ad buying across streaming, mobile, and connected television at global scale.
Recent OpenAds publisher partnerships announced in 2026 strengthen supply transparency and position the platform for deeper CTV penetration.
The company delivered $3 billion in trailing revenue, reflecting continued advertiser migration toward programmatic and streaming-first channels.
Operating income reached $530 million, with margins near 19%, showing operating leverage as infrastructure and data costs scale efficiently.
Even with revenue near 17% growth and rising margins, the stock trades around 19x earnings, highlighting valuation tension.
What the Model Says for TTD Stock
We analyzed The Trade Desk using operating leverage from programmatic scale and connected TV positioning supporting advertiser retention.
Assuming 16.5% revenue growth, 22.2% operating margins, and an 18.7x exit multiple, the model estimates a $47.54 price target.
That implies a 29.1% total return and 14.1% annualized return over 1.9 years, ending at $47.54.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for TTD stock:
1. Revenue Growth: 16.5%
The Trade Desk delivered 26% revenue growth last year, driven by advertiser adoption across connected TV and omnichannel formats.
Five-year historical revenue growth near 30% reflects strong secular tailwinds from CTV penetration and independent demand-side platform share gains.
Growth is moderating as scale increases, but OpenAds partnerships support wallet share gains with premium publishers.
Risks include macro advertising cycles and competition from walled gardens, balanced by diversified channels and strong agency relationships.
According to consensus analyst estimates, a 16.5% revenue growth assumption reflects durable CTV demand tempered by platform maturity and normalized advertising budgets.
2. Operating Margins: 22.2%
The Trade Desk generated operating margins of 10% over the last year, reflecting heavy reinvestment following prior rapid expansion phases.
Five-year average margins of 17% show improving profitability as platform scale reduces incremental infrastructure and operating costs.
Recent margin expansion benefits from higher software efficiency, improved take rates, and operating discipline across sales and engineering functions.
Margin risk stems from continued product investment and data costs, offset by scale economics and recurring advertiser spend.
In line with analyst consensus projections, 22.2% operating margins reflect normalized profitability as growth investments moderate and scale benefits persist.
3. Exit P/E Multiple: 18.7x
The Trade Desk historically traded between 33x and 69x earnings during periods of rapid growth and strong sentiment toward digital advertising platforms.
Current valuation compression reflects investor caution following advertising cyclicality and decelerating growth relative to earlier expansion phases.
Sustained execution in CTV monetization and OpenAds adoption would support earnings durability without requiring renewed speculative enthusiasm.
Downside risks include prolonged ad-spend weakness, while upside depends on consistent earnings delivery and margin stability.
Based on street consensus estimates, an 18.7x exit multiple reflects balanced expectations for mature growth, steady profitability, and disciplined execution.
What Happens If Things Go Better or Worse?
The Trade Desk’s outcomes depend on advertiser demand cycles, connected television adoption, and execution discipline, setting up a range of possible paths through 2029.
- Low Case: If ad budgets stay cautious and platform adoption slows, revenue grows around 14.4% and margins stay near 22.1% → 2.9% annualized return.
- Mid Case: With core channels scaling steadily, revenue growth near 16.0% and margins improving toward 23.8% → 10.0% annualized return.
- High Case: If CTV adoption accelerates and efficiency improves, revenue reaches about 17.6% and margins approach 25.2% → 16.9% annualized return.
The $53.63 mid-case target price is achievable through steady execution and margin gains, without multiple expansion or speculative optimism.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
