Investing.com -- The Trade Desk shares fell more than 27% in premarket trading Friday after the digital advertising company posted second-quarter results and third-quarter guidance that fell well short of Wall Street expectations, prompting several brokerages to downgrade the stock.

The company reported second-quarter revenue of $715.1 million, up 3% year-over-year but below consensus estimates of roughly $752-753 million and management’s own guidance of at least $750 million. Adjusted EBITDA of $241.3 million also missed consensus estimates of around $265 million.

For the third quarter, TTD guided to revenue of "at least $650 million," implying a 12% year-over-year decline, and adjusted EBITDA of approximately $160 million, both well below Street estimates of roughly $807 million and $339 million, respectively.

Raymond James downgraded the stock to Underperform from Market Perform, citing "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." The broker’s analysts noted the third-quarter guidance represents "its first-ever non-pandemic y/y decline in revenue" and said it has "a hard time justifying" the stock’s implied premium to adtech peers given the outlook for sustained declines.

Baird moved to Neutral from Outperform, with analysts writing bluntly that "the 2Q print was just awful, plainly said. The firm previously hoped valuation had reset sufficiently but "clearly there is even more uncertainty here." Baird cut its price target to $9 from $27.

Truist Securities downgraded to Hold from Buy and lowered its price target to $16 from $35, pointing to a mix of macro pressure and internal execution issues. The brokerage highlighted pressure from CPG and Auto clients, including Procter & Gamble, and cited "heightened management turnover" following the announcement of a new CFO, COO, CMO, CCO, and CBDO. Truist said it believes "4Q growth will be diminished by the same issues, keeping growth negative through mid 2027."

Separately, Guggenheim also downgraded to Neutral from Buy, cutting its price target to $12 from $25. The broker said it has "swung from an ~10pp premium in 3Q24 to a ~15pp discount in 2Q26 in quarterly ad growth rate vs. peers, arguing the deceleration is structural rather than cyclical."

Guggenheim also flagged "continued leadership turnover, agency conflict and product inconsistency" and said CEO Jeff Green’s messaging on a path to recovery "feels even further detached from the results."