When evaluating a company's worth, key inputs for a discounted cash flow (DCF) analysis are the discount rate and the actual cash flows. It's important to form your own assessment of a company's future performance and check your assumptions. However, DCF does not consider industry cyclicality or a company's future capital needs, so it may not provide a complete picture. For Trade Desk, we use the cost of equity as the discount rate, which is 6.4% based on a levered beta of 0.842, reflecting the stock's volatility compared to the market.
SWOT Analysis for Trade Desk
Strength: Debt-free status.
Weakness: Expensive based on price-to-sales ratio and estimated fair value.
Opportunity: Forecasted annual earnings growth exceeding the American market.
Threat: Forecasted revenue growth below 20% per year.
Looking Ahead
While company valuation is crucial, it shouldn't be the sole factor in your analysis. The DCF model isn't perfect and should guide assumptions about a stock's valuation. Consider other factors like a company's financial health and future earnings compared to peers and the market. Additionally, explore alternative high-quality stocks for a comprehensive view.
Feedback and Disclaimer
If you have feedback or concerns about this article, reach out to us directly or email editorial-team (at) simplywallst.com. This article is based on historical data and analyst forecasts and doesn't constitute financial advice. It's essential to consider your objectives and financial situation. Our analysis aims for long-term focus using fundamental data and may not include the latest company announcements or qualitative data. Simply Wall St has no position in any mentioned stocks.
Comparing Trade Desk and AppLovin
Trade Desk and AppLovin differ in their business focuses and audiences. Trade Desk is an independent demand-side platform for diverse advertising channels, while AppLovin specializes in mobile app solutions. Trade Desk's revenue growth is moderating, affecting its valuation, while AppLovin's growth rates are more unpredictable. Despite its debt, AppLovin's lower valuation makes it an attractive investment compared to Trade Desk in 2024. smci stock super micro computer stock docn stock price