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Needham is betting on these 3 Ad Tech actions

The internet has transformed advertising and advertising, in turn, has had an impact on the net. From pop-up ads and pay-per-click to targeted advertising, finding and reaching the target audience – the raison d’être of marketers and advertisers has exploded and evolved in the digital age. And with that, an array of ad technology companies, specialists in software and tools that brands and agencies use in their online advertising, have set up, manage and analyze their digital campaigns, results and data. collected. The growing use of smart devices – primarily smartphones and tablets, but ranging from laptops to smartwatches – has been the main driver of the expansion of the ad technology market. This expansion is substantial. According to verified market research, the ad technology software market reached $ 16.2 billion in 2018, barely missed a milestone in the year of the corona crisis, and is expected to reach nearly $ 30 billion in 2026. Watching this explosive growth, Needham analyst Laura Martin – ranked by TipRanks in the top 1% among street stock watchers, and a tech industry expert. Martin has weighed in on some of the biggest companies in the industry. These are companies with Buy from the Street ratings – and Martin sees them with upside potential starting at 30% and increasing from there. Here are the details. The Trade Desk (TTD) Based in Ventura, Calif., The Trade Desk began in 2009. The company offers users a set of software platforms designed for online media buying, providing customers with data, a inventory and publisher integrations, and facilitating custom development to meet user needs. The Trade Desk platform enables digital advertisers and brand managers to leverage their data for organic growth on the internet – across apps, podcasts, streaming TV shows, and “ traditional ” websites. Even after slipping from its maximum share value at the start of this year, the Trade Desk share remains at a high level – it has risen 149% in the past 12 months. In February, the company released its 2020 full year results, posting revenue of $ 836 million, a 26% year-over-year increase. EPS for the year was $ 4.95, up 118% from the previous year. Two key indicators of the profit report show the foundation for the revenue growth and the revenue of Trade Desk. Gross spend – how much advertising spent through the Trade Desk platform – reached $ 4.2 billion in 2020, a record for the company and an increase of 34% year-over-year. And the company reported a 95% customer retention rate in the quarter. Trade Desk boasts of having reported such customer retention quarterly for the past 6 years. That’s not to say that Trade Desk doesn’t face any headwinds. As noted above, the company’s inventory has been down since the start of the year – a drop that coincides with the start of Google’s planned phase-out of third-party cookies on the Chrome browser. These cookies, hated by Internet users as a privacy violation, but valued by advertisers as a massive source of data collection, have already been deleted from Firefox and Safari browsers. Google’s phasing out will remove them from most web browsing activity and hijack a major tool in digital ad technology. However, Martin believes that TTD’s bullish case remains intact and in fact believes that as a leader in the ‘open Internet’ the company is on the verge of ‘taking back market share from the’ Walled Gardens (it ‘s). ie FB, GOOGL, AMZN) ”through“ improved comparability, metrics and shift to CTV ad units ”. “TTD represents pure play on the fastest growing advertising industry: the growth of digital advertising, including connected TV advertising. TTD represents the 800 largest and most demanding advertising agencies and global consumer brands, which is a significant barrier to entry, ”added the 5-star analyst. “TTD is the largest demand-side (i.e. ad buyer) platform in ‘Open Internet’, with $ 4 billion in total ad spend on its platform in 2020 (about 10% of the total open advertising spend on the Internet). ” In addition to his buy rating, Martin gives TTD stocks a one-year price target of $ 1,000, which suggests a 37% rise for the stock. (To look at Martin’s track record, click here.) Overall, Trade Desk has an analyst consensus moderate buy rating, based on 15 recent reviews that include 10 buys versus 5 takes. The stock is not cheap, selling for $ 729.31, but its average price target of $ 915.08 implies a 25% rise for the coming year. (See Trade Desk market analysis on TipRanks.) Magnite (MGNI) The next stock on our list, Magnite, is a “new” company in the ad technology space – it was formed by the merger of two veterans . In 2020, Rubicon Project and Telaria combined, and the result, Magnite, quickly became a major player in the ad technology industry. The company offers ad sales technology to its customers in a range of online formats, including desktop, mobile, audio and video streaming. Magnite offers its users the ability to reach their own customers – and potential customers – quickly and efficiently. Born from a merger, Magnite has recently grown through a merger. On April 30, the company completed its acquisition of SpotX, in a move that created the largest independent CTV and video advertising platform. The acquisition resulted in a total purchase price of $ 1.14 billion, of which $ 640 million was in cash and the remainder paid in 12.374 million shares of MGNI. Magnite will discuss the merger transaction when releasing 1Q21 results later this month. In the meantime, it is instructive to review Magnite’s recent performance. In 4Q20, the company reported revenue of $ 82 million, a 69% year-over-year gain and 34% from the third quarter. The company reported a GAAP EPS of $ 0.05, beating estimates of $ 0.02. Like Trade Desk above, Magnite shares have come under pressure in recent months, although the pullback followed a massive surge – MGNI shares have appreciated 458% in the past 12 months. Going forward, Martin sees the acquisition of SpotX as key here, writing, “Together, MGNI + SpotX will represent the largest programmatic CTV and Video Advertising (SSP) platform. 67% of PF laps will be video tours (about half of CTV). By implication, MGNI will always be part of the SSP set for publishers who have video or CTV ad units for sale. Since digital markets are typically win-win markets, size breeds size due to superiority in data. As the data improves with scale, it creates a positive flywheel that puts smaller competitors to accelerate AI and data downside. These comments confirm Martin’s buy rating on the stock. His price target of $ 70 indicates his confidence in strong one-year upside potential of 74%. Wall Street analysts are mostly bullish here, as shown by the 5: 1 split between the Buy and Hold reviews, giving MGNI shares a Strong Buy consensus rating. The share has an average price target of $ 65.17, suggesting a rise of 63% from the current price of $ 40.05. (See Magnite’s market analysis on TipRanks.) Viant Technology (DSP) Last on our Needham pick list, Viant Technology is promoting itself as an “adware” provider based on people. ”The company offers a demand-side omnichannel platform, Adelphic, used by agencies, brands and media buyers to run advertising campaigns on connected and linear TV, desktops and devices. mobile, and via digital audio rique. Viant has been in the ad technology business for over 20 years, and in February of this year it entered the public markets. The IPO was initially priced at $ 25 per share and closed its first day of trading at over $ 47. The company has sold more than 10 million common shares and raised approximately $ 213 million under the offer. Since the IPO, the stock has slipped 31%, although the share price remains well above the initial IPO price and the company’s market cap is a respectable 1 , $ 94 billion. In March of this year, Viant released its fourth quarter and 2020 annual results – its first publication as a publicly traded company. For the fourth quarter, revenue reached $ 56.6 million, an increase of 9% year-on-year, while gross profit reached $ 30.5 million, up 31% from the quarter of l last year. Full-year results were $ 165.3 million in total revenue, virtually flat from 2019, and $ 77 million in gross profit, a 9% gain from the previous year. The company released several interesting metrics in the quarterly results, showing increased customer usage and growth in video spend. Viant’s platform saw 36% year-over-year spend growth in the fourth quarter, while spending on CTV grew 71% in the quarter – and 70% on a full-year basis. For 2020 as a whole, customer video spend represented 62% of the total. Looking at Viant, Martin notes that the company has relatively little exposure to the industry’s next “cookie crisis”, and writes: “… confusion over the future of third-party cookies is increasing the volume of inbound calls to DSP because advertising agencies and brands know about it The platform does not rely on cookies to target its placement of programmatic ads. Therefore, in addition to benefiting from the rising tide of growth that DSP shares with all other competitors in open Internet advertising technology, we believe that DSP is also in the right place at the right time, because it can take advantage of a track of 4 years. successful sales record of software that allows customers to purchase programmatic advertising without the use of cookies. Martin gave the stock a buy rating and a price target of $ 62, which implies an 89% rise for the next 12 months. Looking at the break in consensus, the general point of view is more cautious; There are 5 recent reviews, and they break down into 2 buys and 3 holds, for a moderate buy consensus rating. The average price target, however, is bullish; at $ 57.33, the figure suggests a one-year increase of 74%. (See Viant’s stock market analysis on TipRanks.) To find great ideas for stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.



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