Reviewing Trade Desk (NASDAQ:TTD) & Zoom Video Communications (NASDAQ:ZM)

Trade Desk (NASDAQ:TTD) and Zoom Video Communications (NASDAQ:ZM) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Valuation and Earnings

This table compares Trade Desk and Zoom Video Communications’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trade Desk $661.06 million 21.43 $108.32 million $2.27 135.51
Zoom Video Communications $622.66 million 76.65 $25.31 million $0.09 1,900.67

Trade Desk has higher revenue and earnings than Zoom Video Communications. Trade Desk is trading at a lower price-to-earnings ratio than Zoom Video Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Trade Desk and Zoom Video Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trade Desk 0 9 5 0 2.36
Zoom Video Communications 2 14 7 0 2.22

Trade Desk currently has a consensus target price of $278.43, suggesting a potential downside of 9.48%. Zoom Video Communications has a consensus target price of $119.26, suggesting a potential downside of 30.28%. Given Trade Desk’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Trade Desk is more favorable than Zoom Video Communications.

Profitability

This table compares Trade Desk and Zoom Video Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trade Desk 17.44% 20.65% 7.77%
Zoom Video Communications 3.73% 3.30% 2.23%

Institutional and Insider Ownership

68.8% of Trade Desk shares are held by institutional investors. Comparatively, 24.4% of Zoom Video Communications shares are held by institutional investors. 13.1% of Trade Desk shares are held by insiders. Comparatively, 24.3% of Zoom Video Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Trade Desk beats Zoom Video Communications on 9 of the 13 factors compared between the two stocks.

Trade Desk Company Profile

The Trade Desk, Inc., a technology company, provides a self-service omnichannel software platform that enables clients to purchase and manage data-driven digital advertising campaigns in the United States and internationally. The company's platform allows clients to manage integrated advertising campaigns in various advertising channels and formats, including display, video, audio, native and social, and on a multitude of devices, such as computers, mobile devices, and connected TV (CTV). It serves advertising agencies and other service providers for advertisers. The Trade Desk, Inc. was founded in 2009 and is headquartered in Ventura, California.

Zoom Video Communications Company Profile

Zoom Video Communications, Inc. provides a video-first communications platform that changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It connects people through frictionless video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting. It serves education, entertainment/media, enterprise infrastructure, finance, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries, as well as individuals. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. Zoom Video Communications, Inc. was founded in 2011 and is headquartered in San Jose, California.

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