Raymond James Downgrades The Trade Desk (TTD) to Underperform

Raymond James analyst Aaron Kessler downgraded The Trade Desk (NASDAQ: TTD) from Market Perform to Underperform.

The analyst comments: “We downgrade shares of The Trade Desk to Underperform following a below-expectations 2Q and a sharply negative 3Q outlook, as macro conditions and buyers showing preferences for lower-cost media combined to drive down spend to the TTD platform. This dynamic is expected to continue into (and even intensify in) 3Q, where the company guided to its first-ever non-pandemic y/y decline in revenue despite potential benefits from Political spend. TTD remains optimistic in a few areas, particularly in the breadth of the problem (noting that a majority of advertisers are growing spend) and the new blood in management ranks with deep industry experience, but for the next few quarters it appears that what TTD can control is far overshadowed by forces beyond its reach, and we see a difficult road back to growth. Even if that growth does materialize, margins are a new question as top-line softens further. While we are later to this call, we still believe that there is room for further multiple contraction; on our updated 2027 estimates, after-hours prices still imply double-digit 2027E EV/EBITDA figures, which represents a healthy premium to the adtech comp group average (near 9x). Given the outlook for sustained top line declines and margin deleverage, we have a hard time justifying that premium.”

For an analyst ratings summary and ratings history on The Trade Desk click here. For more ratings news on The Trade Desk click here.

Shares of The Trade Desk closed at $17.67 yesterday.

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