Shift from Traditional to Connected TV Drives Growth in Digital Marketing Software Platforms
HSBC, the investment bank, has initiated a Buy rating on The Trade Desk Inc. (NASDAQ:TTD) with a price target of $83.20, and AppLovin (NASDAQ:APP) with a price target of $53.20. They have also designated Unity Software Inc. (U) as a Hold with a price target of $37.00.
According to analysts at HSBC, the programmatic industry is poised for continued growth as viewers increasingly shift from traditional TV to Connected TV. In addition, streaming platforms prioritizing ad-supported subscription tiers further enhance the prospects for digital marketing software platforms. In their analysis, they emphasized the role of retail media partnerships and AI-driven solutions in differentiating certain companies in light of the growing global focus on privacy and the expected phase-out of third-party web cookies.
The target price set by HSBC suggests a potential upside of 9.4% to the closing price on December 14.
AppLovin: The Market Leader in Mobile App Install Advertising
HSBC describes AppLovin as “the market leader in mobile app install advertising with a lead in AI solutions.” With the designated price target, there is a potential upside of 37.5% to the December 14 closing price.
Unity Software Inc.: An AdTech Business Turning the Corner
HSBC acknowledges that Unity’s AdTech business is gradually turning around and highlights the positive impact of the revamp of game engine fees, which should contribute to revenue growth. However, they caution that the company faces decreasing organic growth and a substantial convertible debt overhang, with limited prospects of short-term profitability. The price target indicates a downside potential of 3.3% to the closing price on December 14.