Analyzing The Trade Desk (TTD) and Shopify (SHOP)
The Trade Desk (NASDAQ: TTD) and Shopify (NYSE:SHOP) are both mid-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.
Earnings & Valuation
This table compares The Trade Desk and Shopify’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|The Trade Desk||$251.52 million||9.70||$64.25 million||$0.84||71.19|
|Shopify||$509.00 million||23.29||-$34.47 million||($0.51)||-235.82|
The Trade Desk has higher revenue, but lower earnings than Shopify. Shopify is trading at a lower price-to-earnings ratio than The Trade Desk, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
62.8% of The Trade Desk shares are owned by institutional investors. Comparatively, 53.8% of Shopify shares are owned by institutional investors. 26.9% of The Trade Desk shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for The Trade Desk and Shopify, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Trade Desk||0||1||7||0||2.88|
The Trade Desk currently has a consensus price target of $57.63, indicating a potential downside of 3.64%. Shopify has a consensus price target of $93.76, indicating a potential downside of 22.04%. Given The Trade Desk’s stronger consensus rating and higher possible upside, analysts clearly believe The Trade Desk is more favorable than Shopify.
This table compares The Trade Desk and Shopify’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Trade Desk||13.92%||26.34%||9.17%|
The Trade Desk beats Shopify on 9 of the 12 factors compared between the two stocks.
About The Trade Desk
The Trade Desk, Inc. is a technology company. The Company provides a self-service platform that enables clients to purchase and manage digital advertising campaigns across various advertising formats, including display, video and social, and on a range of devices, including computers, mobile devices and connected television. Its platform enables a media planner or buyer at an advertising agency to purchase digital media programmatically on various media exchanges and sell-side platforms; acquire and use third-party data to optimize and measure digital advertising campaigns; deploy their, or their client’s, own first-party data in order to optimize campaign efficacy; link digital campaigns to offline sales results or other business objectives; access other services, such as its data management platform and publisher management platform marketplace, and use its user interface and application programming interfaces (APIs) to build their own technology on top of the Company’s platform.
Shopify Inc. (Shopify) provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. The Company offers subscription solutions and merchant solutions. The Company’s software is used by merchants to run their business across all of their sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts and marketplaces. The Shopify platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics and reporting all from one integrated back office. The Shopify platform includes a mobile-optimized checkout system, which is designed to enable merchants’ consumers to buy products over mobile Websites. Its merchants are able to offer their customers the ability to check out by using Apple Pay.
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