- Stifel downgraded TTD to ‘Hold,’ while RBC Capital maintained ‘Overweight.’
- ‘TTD has not ‘failed’ any audit ever,’ CEO Jeff Green said, refusing to disclose the bills of its clients and partners to one.
- Stocktwits sentiment for TTD shifted to ‘bullish’ from ‘bearish.’
The Trade Desk shares tumbled to their sharpest single-day drop in over two months on Tuesday, prompting at least one Wall Street analyst to downgrade the stock after a major ad-buying firm advised clients to steer clear of TTD’s platform amid billing disputes.
Analysts React
Stifel downgraded its rating on the TTD stock to ‘Hold’ from ‘Buy,’ and lowered the price target to $26 from $48. The new target implies a gain of less than $1 from the stock’s last close.
Stifel told investors that while it does believe The Trade Desk remains the gold standard for digital ad buyers, and the firm imagines there will be some resolution with Publicis, it struggles to find a clear catalyst that will begin to change investor perception to a more positive stance in the near-term, according to the investor note summary on The Fly.
On the other hand, RBC Capital reiterated its ‘Outperform’ rating and $40 price target.
Last week, The Trade Desk CEO Jeff Green made a massive $148 million purchase of the company's stock. That, coupled with reports of talks for an ad deal with OpenAI, lifted the company’s shares and attracted bullish commentary and upgrades from some analysts.
Currently, 19 of 38 analysts recommend ‘Buy’ or higher for TTD, while 16 recommend ‘Hold,’ per Koyfin. On average, they forecast a 26% upside over the next 12 months from the current level.
Publicis’ Claim, TTD’s Response
On Tuesday, Publicis sent its clients a memo saying it can no longer recommend The Trade Desk after an independent audit allegedly found problems with how certain fees were applied, according to a report in AdWeek.
The company had failed an audit by a third-party consultant, FirmDecisions, evaluating its fee structures and media and data spend, the ad agency said. It is alleged that The Trade Desk billed Publicis and its clients for tools they were automatically enrolled in, without evidence of authorization, and failed to justify this in the audit.
The company pushed back against the claims, per its statement to AdWeek, arguing that the data request encountered confidentiality issues. A spokesperson from The Trade Desk reportedly said the firm has “proposed a range of options to Publicis,” and would continue to work with the advertising giant “to provide workable alternatives to this particular request.”
“TTD has not ‘failed’ any audit ever,” CEO Jeff Green said in a LinkedIn post. “We will not disclose the bills of all of our clients and partners to one of them simply because they assert ambiguous audit rights.
Retail’s View On TTD
Discussion around the issue picked up on Stocktwits, even as the retail sentiment for TTD shifted to ‘bullish’ from ‘bearish’ the previous day.
It appears that “TTD did not want to give Publicis data because they could get sued for privacy breach. Overall Publicis seems like a cry baby that’s mad at the price, it’s quite unprofessional and petty especially misusing (the word) Audit,” remarked a user.
Several users dismissed the claims from Publicis, speculating that they were the result of stock manipulation and “fake news” by malicious actors. “Expecting an IR News tomorrow from TTD and a huge counter news. this will pop,” a user said.
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