Investing.com -- Jefferies urged caution on Trade Desk in a note on Thursday ahead of the company’s first-quarter earnings, warning that consensus revenue expectations for the second half of 2026 look "overly aggressive" and that further estimate cuts are likely in store.

Analyst James Heaney says the firm does not think it has seen the last cut yet, flagging that Street forecasts imply gross spend acceleration of around 300 basis points to 13% year-on-year in 2026, a hurdle Jefferies finds "tough to underwrite" given that full-year 2025 gross spend grew only around 10%.

On near-term results, Jefferies models Q1 revenues in line with guidance at 10% year-on-year growth, though acknowledges a typical 1–2% beat is possible given resilient broader ad market trends.

However, the firm sees limited upside to Q2 Street estimates of 12% growth, and warns that recent fee scrutiny following holdco and Publicis headlines raises the risk of near-term gross spend pullbacks and take rate compression.

Looking further out, Jefferies flags that Street Q3 revenue estimates imply 8% sequential growth quarter-on-quarter, a rate Trade Desk has not achieved since 2021.

Structural concerns compound the cautious outlook. Jefferies points to sustained Amazon competition, the threat of AI-native platforms capturing experimental budgets, management turnover, and elevated stock-based compensation weighing on valuation.

The firm is also "skeptical that an OpenAI partnership would be material" to Trade Desk's outlook.

“While sentiment is washed out, we're not prepared to call a bottom. No model changes, reiterate Hold and $22 PT,” Heaney concluded.