Now that The Trade Desk (TTD -1.80%) has traded for more than eight years now, investors can now take stock of its historical returns. Its demand-side platform has helped companies and agencies manage digital ad campaigns, strategically placing ads where they can yield the most value.
Moreover, the stock has become a boon for its shareholders. Even if an investor bought only one $18 share on its Sept. 21, 2016, initial public offering (IPO) date, it may come as a surprise how much that holding has grown.
How investors in The Trade Desk have fared
Amid its growth, an $18 investment in its IPO is now worth $1,390 as of the time of this writing, an approximate 77-fold gain.
Soon after its IPO, The Trade Desk’s stock made gains as the company pivoted into the connected TV market, and a move into the Asia-Pacific region served to enhance those gains.
Additionally, its growth further accelerated during the pandemic-driven bull market in 2020 and 2021. So profound were the stock gains that the company initiated a 10-for-1 stock split on June 16, 2021.
Even though The Trade Desk pulled back significantly in the 2022 bear market, it has since recovered those losses and now sells for close to record highs. A move into Europe and partnerships with the likes of Spotify and Roku further boosted the company’s growth.
Indeed, at a price-to-sales (P/S) ratio of 30, investors may perceive the stock as overpriced. Nonetheless, Grand View Research forecasts a compound annual growth rate of 16% for the digital ad industry through 2030.
Thus, even if the stock experiences a near-term pullback, The Trade Desk’s role in this industry makes it unlikely the long-term gains will end anytime soon.
Will Healy has positions in Roku and The Trade Desk. The Motley Fool has positions in and recommends Roku, Spotify Technology, and The Trade Desk. The Motley Fool has a disclosure policy.
