The Trade Desk, Inc. (TTD) Intrinsic Value & DCF Valuation
Software - Services · NASDAQ
Current Price
$19.09
Intrinsic Value
$28.71
+33.5% margin of safety
What Is The Trade Desk, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of The Trade Desk, Inc. (TTD) at $28.71 per share, compared with a market price of $19.09, a margin of safety of +33.5%. The base case assumes 10.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $21.58 to $36.96. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is The Trade Desk, Inc. (TTD) Undervalued?
At the current price of $19.09, TTD trades well below the base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Data and Scale Advantage
TTD's extensive data collection and processing capabilities create a significant advantage. This scale allows for more effective ad targeting and campaign optimization.
↑Platform Independence
As an independent ad-tech platform, TTD avoids the conflicts of interest inherent in walled-garden ad systems. This neutrality attracts a broader advertiser base.
↑Technological Innovation
Continuous investment in its platform and AI-driven solutions allows TTD to offer advanced advertising capabilities. This keeps it ahead of competitors in a rapidly evolving market.
INVESTMENT RISKS
↓Regulatory Scrutiny
The digital advertising industry faces increasing regulatory oversight regarding data privacy and ad practices. New regulations could impact TTD's data utilization and business operations.
↓Economic Downturn Impact
Advertising spend is cyclical and highly sensitive to economic conditions. A recession could lead to reduced budgets, impacting TTD's revenue and growth.
↓Technological Disruption
The rapid pace of technological change, including AI advancements and evolving ad formats, presents a constant challenge. TTD must continually innovate to remain competitive.
Base case
TTD base case valuation
Intrinsic Value
$28.71
Margin of safety
+33.5%
Expected annual return
+8.5%
Base case assumptions: 10.2% annual growth, 10.0% discount rate, 11x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the TTD valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for The Trade Desk, Inc. respond.
Open DCF Calculator for TTDCompany Overview
The Trade Desk, Inc. is a global technology company that provides a self-service, cloud-based platform. This platform enables advertising buyers to efficiently create, manage, and optimize data-driven digital ad campaigns across diverse formats and channels, including display, video, audio, native, and social media, reaching audiences on computers, mobile devices, and connected TVs. In addition to the platform, the company offers various data and value-added services. Their primary clients are advertising agencies and other service providers who represent advertisers. The Trade Desk was founded in 2009 and is headquartered in Ventura, California.
Financial Metrics — TTD Stock Valuation Data
Revenue/Share (TTM)
$6.26
FCF/Share (TTM)
$1.76
ROIC (TTM)
13.5%
ROE (TTM)
16.9%
P/FCF
10.7x
EV/EBITDA
10.8x
FCF Yield
9.32%
Debt/Equity
0.17x
Based on trailing twelve-month data, TTD shows a free cash flow per share of $1.76 and a ROIC of 13.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 10.7x and FCF yield of 9.32% are important context metrics when evaluating TTD's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of TTD?
The Trade Desk, Inc. currently generates $1.76 in free cash flow per share. At the current price of $19.09, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is TTD undervalued?
TTD trades at a P/FCF ratio of 10.7x with a free cash flow yield of 9.32%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether TTD is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value TTD stock using DCF?
To perform a DCF valuation on The Trade Desk, Inc.: (1) Start with the trailing free cash flow per share ($1.76) as the base, (2) project future FCF growth over 5-10 years based on Software - Services industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting TTD's risk profile — with a debt-to-equity of 0.17x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to TTD?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The Trade Desk, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Software - Services trends, then discounting those amounts to today's dollars. TTD's ROIC of 13.5% shows moderate capital returns.
How does WACC affect TTD stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For TTD, with a debt-to-equity ratio of 0.17x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See TTD PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Technology valuationsDCF and P/E value TTD with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.