Thoughts on $TTD

$TTD posted 19% revenue growth this quarter and earnings came in slightly ahead of expectations. Management guided for 14% growth next quarter but they also said they expect things to accelerate after that. On the surface those numbers are fine. They are not blowing the doors off but they are steady and moving in the right direction.

The market clearly disagreed. The stock fell almost 40% after the report. That is a huge move for a company that is still growing and still profitable. The main excuse people are using is the CFO’s departure. I do not see that as a reason for this kind of selloff. CFOs come and go. The fundamentals did not change overnight.

At around 27x forward earnings I actually think $TTD looks cheap compared to its own history. This is a business with a large market, recurring ad spend from big brands, and a strong competitive position in connected TV. I have seen a lot of people trying to make it sound like they saw this drop coming because of some brilliant forecast. Most of that is just noise, they sold the stock and then built the story after the fact.

My five bagger is now about two and a half but that is part of the game. In my years of investing I have sat through many steep drops and most of the time the right move was to do nothing. If the long term story is intact you wait it out. $TTD still has a great business model, the numbers are solid, and I think the market reaction is overblown. Time will tell but I am willing to sit and see how this plays out.

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