Did The Underlying Business Drive Trade Desk's (NASDAQ:TTD) Lovely 896% Share Price Gain?

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the The Trade Desk, Inc. (NASDAQ:TTD) share price, which skyrocketed 896% over three years. And in the last month, the share price has gained 3.2%. We note that Trade Desk reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.” data-reactid=”18″>Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. You won’t get it right every time, but when you do, the returns can be truly splendid. Take, for example, the The Trade Desk, Inc. (NASDAQ:TTD) share price, which skyrocketed 896% over three years. And in the last month, the share price has gained 3.2%. We note that Trade Desk reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.

Anyone who held for that rewarding ride would probably be keen to talk about it.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" View our latest analysis for Trade Desk ” data-reactid=”20″> View our latest analysis for Trade Desk

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

Trade Desk became profitable within the last three years. Given the importance of this milestone, it’s not overly surprising that the share price has increased strongly.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

NasdaqGM:TTD Past and Future Earnings, December 2nd 2019NasdaqGM:TTD Past and Future Earnings, December 2nd 2019
NasdaqGM:TTD Past and Future Earnings, December 2nd 2019

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="We know that Trade Desk has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Trade Desk stock, you should check out this FREE detailed report on its balance sheet.” data-reactid=”36″>We know that Trade Desk has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Trade Desk stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It's nice to see that Trade Desk shareholders have gained 78% (in total) over the last year. The TSR has been even better over three years, coming in at 115% per year. If you would like to research Trade Desk in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.” data-reactid=”38″>It’s nice to see that Trade Desk shareholders have gained 78% (in total) over the last year. The TSR has been even better over three years, coming in at 115% per year. If you would like to research Trade Desk in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But note: Trade Desk may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).” data-reactid=”39″>But note: Trade Desk may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.” data-reactid=”40″>Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.” data-reactid=”41″>If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Recommended For You

About the Author: kevinbishop