TTD Stock Faces ‘New Reality’ As Analyst Warns Of 50% Downside Risk

• Analyst Bianca Dallal said growing competition from media-driven AI advertising tools is putting pressure on The Trade Desk’s take rate.
• The brokerage said consensus estimates “need to meaningfully rebase” to reflect The Trade Desk’s “new reality” of increasing pressure on take rates.
• Among the 37 analysts covering the stock, 14 rate it a ‘buy,’ 20 recommend ‘hold,’ and three maintain a ‘sell’ rating, according to Koyfin data

Shares of The Trade Desk, Inc. (TTD) slid more than 4% on Thursday after a bearish analyst call cast a shadow over the company’s long-term growth outlook, warning that investors may need to adjust to a “new reality” for the digital advertising giant.

TTD stock has remained under sustained pressure and is on pace to post its sixth monthly decline over the past seven months.

AI Ad Tools Add Pressure To TTD’s Take Rate

On Thursday, Rothschild & Co Redburn initiated coverage of The Trade Desk with a ‘Sell’ rating and $11 price target, according to The Fly. This indicates a near 50% downside from current levels.

Analyst Bianca Dallal said growing competition from media-driven AI advertising tools is putting pressure on The Trade Desk’s take rate, which stands at around 20%, as rivals like Google and Amazon already offer some programmatic advertising services at no cost.

Dallal added that consensus estimates “need to meaningfully rebase” to reflect what she described as the company’s “new reality” of slower gross spending growth and increasing pressure on take rates.

Among the 37 analysts covering the stock, 14 rate it a ‘Buy,’ 20 recommend ‘Hold,’ and three maintain a ‘Sell’ rating, according to Koyfin data. Wall Street currently has a consensus 12-month price target of $25.81 on the stock.

TTD’s Q1 Margins Shrink

While TTD’s first-quarter revenue topped Wall Street expectations, the company reported weaker net margins, and its earnings per share came in below analyst estimates. TTD has missed its EPS targets in two of the past four quarters.

DA Davidson said the company’s second-quarter outlook points to slower growth, which management blamed on macroeconomic and Middle East-related uncertainty affecting spending by some of Trade Desk’s largest global clients.

Retail’s TTD Take

Retail sentiment for TTD on Stocktwits has remained in the ‘bearish’ zone over the past 24 hours.

One user highlighted the “radio silence” on corporate developments.

The stock has crashed nearly 44% so far this year.

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