TTD: Hold + Reduce
Published 21 Sep 2026, 08:53 BST. This is the frozen version, not the current recommendation.
Why this assessment was issued
Stored financial statements changed; the revised figures need checking. The model version changed. Required data is available again; reconsider the suspended assessment. The published model version has been replaced. Record the new calculation basis even if the rating is unchanged. The central target is 15.9% below the price. The stronger case offers 18.8% upside, exceeding the central downside; the negative view is qualified.
The central target is 15.9% below the price. The stronger case offers 18.8% upside, exceeding the central downside; the negative view is qualified.
Supporting evidence
Borrowing is lower relative to earnings
Net debt / EBITDA: -1.0× for TTD, against 0.3× across 12 comparable peers.
Quarterly sales are growing
Revenue changed +3.0% from the same quarter last year, through 2026-06-30. The previous quarter’s year-on-year change was +11.8%.
Opposing evidence
The profit margin narrowed
The latest quarterly operating margin was 14.2%, -2.6 percentage points from a year earlier. Compare the sales and margin contributions below.
Year-to-date profit is lower
Across 2 completed quarters since 2025-12-31, net income was 104.4m versus 140.8m in the matching prior-year periods (USD). Check whether the latest quarter changes that direction.
The original scenarios
| Scenario | Sales growth | Profit margin | Model value |
|---|---|---|---|
| Weaker | 8.0% | 10.4% | $8.05 |
| Central | 13.0% | 14.0% | $11.71 |
| Stronger | 18.0% | 17.5% | $16.54 |
Method: Cash flow across the cycle. Loss periods, gaps or differences in the earnings basis make P/E less useful here. This assessment uses operating profit, capital spending and the balance sheet instead. Loss years remain in the margin history. The earnings method could not pass its required checks; the cash-flow method passed its own input checks. These scenarios are not probability intervals.
Original assumptions and checks
| tax | 25 |
|---|---|
| price | 13.92 |
| years | 1.212867898699521 |
| claims | 0.0 |
| growth | 13.049280206926827 |
| margin | 19.608325769579864 |
| profit | 406888000.0 |
| shares | 469880194.0 |
| cash_ok | True |
| debt_ok | True |
| growths | [17.741108506789626, 14.274937517880959, 11.823622895972697, 3.0283600777477826] |
| revenue | 2990138000.0 |
| discount | 10.401004671817162 |
| downside | 42.204624275531124 |
| interest | 2110000.0 |
| leverage | -1.2666391696048622 |
| net_debt | -688869000.0 |
| terminal | 2 |
| free_cash | 863049000.0 |
| ppe_ratio | 0.15221738929775147 |
| buy_hurdle | 32.341821417348456 |
| extra_debt | 0 |
| volatility | 54.68364283469691 |
| basis_notes | [] |
| capex_ratio | 0.07311535454216495 |
| cash_profit | 406888000.0 |
| share_ratio | Not available |
| annual_years | 5 |
| capital_cost | {'tax': 25.0, 'beta': 1.2271807523438387, 'debt': 434110000.0, 'beta_end': '2026-09-18', 'discount': 10.401004671817162, 'debt_cost': 6.51, 'risk_free': 5.01, 'beta_start': '2023-09-29', 'beta_weeks': 156, 'source_url': 'https://home.treasury.gov/resource-center/data-chart-center/interest-rates', 'debt_weight': 6.223940001770723, 'equity_cost': 10.767269174479463, 'equity_value': 6540732300.48, 'adjusted_beta': 1.1514538348958925, 'credit_spread': 1.5, 'equity_premium': 5.0, 'risk_free_date': '2026-09-18', 'observed_interest': 0.48605192232383493} |
| depreciation | 4.236125556746879 |
| normal_capex | 4.95725599843516 |
| tax_measured | False |
| current_capex | 7.311535454216495 |
| working_ratio | 0.20659247165181005 |
| financial_date | 2026-06-30 |
| interest_cover | 197.72026232299828 |
| operating_cash | 1081674000.0 |
| terminal_share | 74.98156544267613 |
| reporting_basis | quarterly |
| uncapped_growth | 13.049280206926827 |
| projected_margin | 13.952190618009148 |
| capital_inventory | {'date': '2026-06-30', 'values': {'physical_ppe': 455151000.0, 'total_assets': 5764446000.0, 'total_equity': 2574352000.0, 'cash_and_equivalents': 1122979000.0, 'total_current_assets': 4815827000.0, 'operating_lease_assets': 335228000.0, 'short_term_investments': 362354000.0, 'total_current_liabilities': 2793676000.0, 'operating_lease_noncurrent': 353188000.0}, 'version': 'capital-scope-3', 'currency': 'USD', 'evidence': {'physical_ppe': [{'end': '2026-06-30', 'tag': 'PropertyPlantAndEquipmentNet', 'unit': 'USD', 'filed': '2026-08-06', 'value': 455151000.0, 'accession': '0001671933-26-000086', 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/0001671933-26-000086-index.html'}], 'total_assets': [{'end': '2026-06-30', 'tag': 'Assets', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_assets', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 5764446000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_verified': True}], 'total_equity': [{'end': '2026-06-30', 'tag': 'StockholdersEquity', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_equity', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 2574352000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_verified': True}], 'cash_and_equivalents': [{'end': '2026-06-30', 'tag': 'CashAndCashEquivalentsAtCarryingValue', 'date': '2026-06-30', 'unit': 'USD', 'field': 'cash_and_equivalents', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 1122979000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_verified': True}], 'total_current_assets': [{'end': '2026-06-30', 'tag': 'AssetsCurrent', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_current_assets', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 4815827000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_table': 8, 'statement_verified': True}, {'end': '2026-06-30', 'unit': 'USD', 'value': 4815827000.0, 'financial_period_id': 6091607}], 'operating_lease_assets': [{'end': '2026-06-30', 'tag': 'OperatingLeaseRightOfUseAsset', 'unit': 'USD', 'filed': '2026-08-06', 'value': 335228000.0, 'accession': '0001671933-26-000086', 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/0001671933-26-000086-index.html'}], 'short_term_investments': [{'end': '2026-06-30', 'tag': 'ShortTermInvestments', 'date': '2026-06-30', 'unit': 'USD', 'field': 'short_term_investments', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 362354000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_table': 8, 'statement_verified': True}, {'end': '2026-06-30', 'unit': 'USD', 'value': 362354000.0, 'financial_period_id': 6091607}], 'total_current_liabilities': [{'end': '2026-06-30', 'tag': 'LiabilitiesCurrent', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_current_liabilities', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 2793676000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_table': 8, 'statement_verified': True}, {'end': '2026-06-30', 'unit': 'USD', 'value': 2793676000.0, 'financial_period_id': 6091607}], 'operating_lease_noncurrent': [{'end': '2026-06-30', 'tag': 'OperatingLeaseLiabilityNoncurrent', 'date': '2026-06-30', 'unit': 'USD', 'field': 'operating_lease_noncurrent', 'filed': '2026-08-06', 'scope': 'consolidated statement', 'start': None, 'value': 353188000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/1671933/000167193326000086/ttd-20260630.htm', 'statement_verified': True}]}, 'conflicts': []} |
| cash_profit_basis | Reported net profit |
| historical_margin | 13.952190618009148 |
| year5_value_share | 74.98156544267613 |
| depreciation_ratio | 0.042361255567468795 |
| net_debt_at_target | -688869000.0 |
| investment_treatment | {'basis': 'Marketable investments use their reported carrying value, separately from cash and operating profit. No future gain or sale is assumed. Long-term holdings and material tax claims require their own basis.', 'version': 'capital-scope-3', 'complete': True, 'gross_investments': 362354000.0, 'working_ratio_after': 0.20659247165181005, 'working_ratio_before': 0.32777550735116573, 'marketable_investments': 362354000.0} |
| non_operating_assets | 362354000.0 |
| non_operating_profit_material | False |
Recent price · Passed. Weekly close dated 2026-09-18.
Current financials · Passed. Statements through 2026-06-30; factor prices dated 2026-09-18.
Price risk · Passed. Risk uses the latest 52 weekly price changes.
Operating history · Passed. 5 annual results, retaining operating losses and unusually strong years.
Quarterly operating results · Passed. Four quarters through 2026-06-30.
Cash-flow and ownership inputs · Passed. Capital spending, depreciation estimate, operating capital, debt, cash and other ownership claims are recorded.
Depreciation basis · Passed. Four matching quarters of operating income and reported depreciation are required. An unrelated EBITDA-minus-EBIT difference is not treated as depreciation.
Matching currency · Passed. USD statements and share price.
Operating totals · Passed. Quarterly sales and operating profit agree with the trailing snapshot within 5%.
Operating discount rate · Passed. The operating cash-flow discount rate needs a current USD Treasury rate, at least two years of matching market returns, and dated debt and share inputs. An equity return hurdle is not used as the company's funding cost.
Continuing growth and funding cost · Passed. The funding cost must exceed continuing growth in every valuation scenario.
Scenario consistency · Passed. The weaker, central and stronger assumptions must give an ordered range. When growth costs more capital than it earns, a tailored operating review is required before publishing a target.
Target publication review · Passed. The model estimate is within SM's automatic publication range of one quarter to four times the current price. This is a review threshold, not evidence that the market price is correct.
Cash-flow value dependence · Passed. Cash flows beyond year five account for 75.0% of the absolute present value. This is within SM's 90% automatic publication limit.
Investment assets and operating capital · Passed. No material unvalued investment balance was identified in the available capital inventory. This does not establish that every asset has been independently appraised.
Policy sm-review-2-research · Model sm-assessment-14-operating-capital · Data f9a7695c7d3e.