Yahoo Finance Those who invested in Trade Desk (NASDAQ:TTD) five years ago are up 329%
Long term investing can be life changing when you buy and hold the truly great businesses. And highest quality companies can see their share prices grow by huge amounts. For example, the The Trade Desk, Inc. (NASDAQ:TTD) share price is up a whopping 329% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. It's also good to see the share price up 15% over the last quarter.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Trade Desk
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).
During five years of share price growth, Trade Desk achieved compound earnings per share (EPS) growth of 15% per year. This EPS growth is slower than the share price growth of 34% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 237.45.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Trade Desk has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Trade Desk will grow revenue in the future.
A Different Perspective
Trade Desk shareholders have received returns of 28% over twelve months, which isn't far from the general market return. We should note here that the five-year TSR is more impressive, at 34% per year. More recently, the share price growth has slowed. But it has to be said the overall picture is one of good long term and short term performance. Arguably that makes Trade Desk a stock worth watching. 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.
Of course Trade Desk may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
