The Trade Desk stock price double tops ahead of earnings: buy or sell?

The Trade Desk (NASDAQ: TTD) stock price has done well this year as technology companies rally. The shares have jumped by 56% in the past 12 months and by 93% this year. It has outperformed the Nasdaq 100 index and other American indices.

Trade Desk earnings preview

The Trade Desk is one of the biggest technology companies in the advertising industry. It helps companies to execute integrated campaigns across various ad formats and channels. It is in an industry that is continually growing as most advertising goes digital and demand for big data continues.

The Trade Desk stock price has jumped in the past few months, helped by the company’s strong performance. Its revenue jumped by 21.40% in the first quarter to over $382 million. This revenue jumped because of the ongoing trend towards the unbiased, and data-driven advertising in the industry.

Its most recent results also showed that the company’s EBITDA jumped to $109 million in the quarter. Its free cash flow jumped to over $177 million. Most of its revenue - 88% - came from the United States while its international revenue growth soared. 

Analysts believe that the company’s business did well in the second quarter. In its last statement, the company estimates that its revenue will be about $452 million, a 20% year-on-year increase. Analysts are more optimistic as they expect it to be about $454 million. Its EPS is expected to come in at 26 cents.

The Trade Desk has been in a strong upward trend in the past few years. Its annual revenue jumped from over $477 million in 2018 to over $1.57 billion in 2022. Its profits came in at over $53 million in 2022.

Analysts have a positive outlook for the TTD stock price. Those at BTIG, Needham, Stifel, and Morgan Stanley believe that the shares will rise to over $90. 

The Trade Desk stock price forecast

The daily chart shows that the Trade Desk share price has been in a strong bullish trend in the past few months. This rally jumped to a high of $91.70 in July and pulled back to the current $85. It has moved above the 50-day and 100-day moving averages.

Further, the stock has formed a double-top pattern whose neckline is at $81.68. In price action analysis, this pattern is usually a bearish sign. Therefore, there is a possibility that the shares will have a bearish breakout after its earnings. If this happens, the next level to watch will be at $76.61, the highest point on August.

To be clear, making a pre-earnings prediction is not easy since stocks tend to have some volatility before and after earnings.