A Freshly Public AdTech Stock with a Big Catalyst By Luke Lango and the InvestorPlace Research Staff If you follow the AdTech world, then you know Google announced some game-changing news last week. Specifically, Google said that it would delay its phase-out of third-party cookies by at least 12 months, from late 2022, to late 2023. Some context here is required… In internet speak, "cookies" are little bits of data about consumers that are stored on websites. They store information like your login info, your browsing history, and your searches. Web publishers use what are known as first-party cookies – or cookies installed on a website by the website owner – to remember your username and password, and personalize your feed with posts you'll enjoy. It's how websites like InvestorPlace remember you. Digital advertisers and marketers use what are known as third-party cookies – or cookies installed on a website by a third party – to track your usage activity, browsing history, and searches, so as to deliver to websites relevant ads that you'll actually want to see and may actually interact with. To that extent, the world of data-driven digital advertising – which is the world of the future, because it delivers the right ads to the right customers – is built on the back of third-party cookies. Which brings us to the crux of the problem: Google is phasing out those third-party cookies from its Chrome browser, which owns about 70% of the global internet browser market share. It's an existential crisis for a data-driven digital advertising industry that's been in hypergrowth mode for several years. But this crisis may not ever happen. Google delaying the phase-out of cookies does two things. One, it gives the AdTech world more time to roll-out, test, and enhance a substitute solution – like The Trade Desk's Unified ID 2.0 platform. Two, it emphasizes that Google may forever struggle to phase-out cookies while preserving a solid user experience, and it increases the likelihood that such a phase-out may never happen. In other words, last week's news was an all-around BIG positive for AdTech stocks. Which is why we believe now is one of the best times in recent memory to buy AdTech stocks. Because what you have with this group of stocks is a bunch of hypergrowth, long-term winners, that have been hit hard on "cookie crisis" concerns, but which now are ready to roar back to life as cookie crisis fears abate. So, in today's edition of The Daily 10X, we are going to tell you about one of our favorite, completely-under-the-radar AdTech stocks to buy on this rebound. It's one of the newer, smaller companies in the space. But it is growing very quickly, has a ton of potential, and trades at a huge discount to peers. When all is said and done, this AdTech stock could end up being the biggest winner in the bunch. Undervalued and Underappreciated, This Hypergrowth AdTech Stock is Ready to Roar We were among the first analyst teams to openly praise and endorse The Trade Desk stock back in 2018 – since then, shares have soared as much as 937%. One of the things we really liked about The Trade Desk back in 2018 was that it was both undervalued and underappreciated. That is, at the time, you had a hypergrowth company, with a ton of potential in an industry that was booming, yet the stock was floundering and trading at a rather cheap ~10X trailing sales multiple. That set the stage for shares to soar 10X over the next three years. We believe we have the exact same set-up with Tremor (TRMR) today. Tremor is a data-driven AdTech company just like The Trade Desk. The difference is that The Trade Desk provides just demand-side services, i.e. the company leverages data to help ad buyers optimize their ad campaigns. Tremor does that, too, but also provides sell-side services where the company leverages data to help ad sellers optimize their ad inventory. It's a dual-sided, data-driven ad tech platform. The company believes it can leverage synergies between its SSP and DSP platforms to generate better results for customers, through leveraging data about sell-side ad inventory to help improve an ad buyer's ad campaign. Makes sense. And the proof is in the pudding. Tremor is growing its revenues very quickly, and revenue retention among current customers is above 100%, meaning customers are spending more and more money on the platform every year (so the platform is working). Oh, and for what it's worth, the company has landed some big customers in this space, including fuboTV, Forbes, and the NFL. The business model is also highly scalable. Gross margins were above 60% last year. And expenses are under control, with adjusted EBITDA margins of 29% in 2020. Long story short, this company has all the makings of an early-stage winner. A hypergrowth company, in a booming industry, with great growth rates, a big customer list, and attractive margins. Looks a lot like The Trade Desk back in 2018… But the best part about Tremor stock – as was the case with The Trade Desk stock back in 2018 – is the valuation. Tremor will easily clear $300 million in revenue over the next 12 months. The company has a $1.4 billion market cap. That means Tremor stock is trading around 4.7X forward sales. That's the same sales multiple The Trade Desk stock featured back in early 2017 – today, the stock trades at 44X trailing sales. In other words, Tremor stock looks a lot like what The Trade Desk stock looked like a few years back. And we would know, because we were pounding on the table about The Trade Desk stock back then. Now, we are pounding on the table about Tremor stock. So, maybe you should go ahead and throw this one on your buy radar today. Small-cap stocks that can rise 10X over the long run are often volatile. If you are interested in this stock, buy it like a pro by setting strict limit prices. Learn more about how to use limit orders here. | Key Company Details | | Company Name | Tremor International Ltd | | Ticker Symbol | TRMR | | Yesterday's Close | $19.54 | | Current Market Value | $1.4 Billion | | Annual Revenue | $244 Million | | Catalyst | Data-Driven Advertising Revolution |
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