The Trade Desk Stock Plummets but Remains Undervalued
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy TTD?
Source: Fool
- Significant Stock Decline: The Trade Desk's stock has plummeted 81% from its record high, currently trading at $27, yet Wall Street analysts view it as deeply undervalued with a median target price of $50, indicating an 85% upside potential.
- Advantage of Independent Business Model: As a demand-side platform (DSP), The Trade Desk's independence helps it avoid conflicts of interest associated with media ownership, encouraging more publishers to share data, which enhances the effectiveness of its advertising measurement tools, particularly in the open internet advertising space.
- Increased Competitive Pressure: While The Trade Desk shows strong performance in connected TV and off-site retail advertising, its third-quarter revenue growth of 18% pales in comparison to competitors like Amazon and Meta, which reported growth rates of 24% and 26%, respectively, indicating market share pressures.
- Future Growth Expectations: Although analysts anticipate The Trade Desk's adjusted earnings to grow at 15% annually through 2027, the rise of generative AI tools is expected to slow open internet ad spending from 25% in 2024 to 5% by 2028, potentially impacting its long-term growth prospects.
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Analyst Views on TTD
Wall Street analysts forecast TTD stock price to rise
25 Analyst Rating
15 Buy
9 Hold
1 Sell
Moderate Buy
Current: 26.140
Low
39.00
Averages
59.68
High
90.00
Current: 26.140
Low
39.00
Averages
59.68
High
90.00
About TTD
The Trade Desk, Inc. is a global advertising technology company. The Company offers a self-service, cloud-based ad-buying platform that empowers its clients to plan, manage, optimize and measure more expressive data-driven digital advertising campaigns. Its platform allows clients to execute integrated campaigns across ad formats and channels, including connected television (CTV) and other video, display, audio, and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. Its platform’s integrations with inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and its enterprise application programming interfaces (APIs) enable its clients to customize and expand platform functionality. Its platform provides auto-optimization features that allow buyers to automate their campaigns and support them with computer-generated modeling and decision-making.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Remitly's Growth Potential: Remitly Global (RELY) successfully facilitated $19.5 billion in transfers in Q3 last year, a 35% year-over-year increase, generating $419.5 million in revenue with EBITDA of $61.2 million, up 29%, and analysts expect this growth momentum to continue through 2028, showcasing its strong competitive position in the international payments market.
- The Trade Desk's Value Recovery: The Trade Desk (TTD) has been impacted by the overall market downturn, but its revenue is projected to grow by 16% in 2023, with a current P/E ratio of only 12 times, indicating investment value, as the market has yet to recognize its necessity.
- Market Environment Challenges: While the overall market faces uncertainty, stocks like Qualcomm, Remitly, and The Trade Desk demonstrate strong resilience, suggesting that investors may consider these potential stocks for long-term gains amid market volatility.
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The Trade Desk Stock Plummets but Remains Undervalued
- Significant Stock Decline: The Trade Desk's stock has plummeted 81% from its record high, currently trading at $27, yet Wall Street analysts view it as deeply undervalued with a median target price of $50, indicating an 85% upside potential.
- Advantage of Independent Business Model: As a demand-side platform (DSP), The Trade Desk's independence helps it avoid conflicts of interest associated with media ownership, encouraging more publishers to share data, which enhances the effectiveness of its advertising measurement tools, particularly in the open internet advertising space.
- Increased Competitive Pressure: While The Trade Desk shows strong performance in connected TV and off-site retail advertising, its third-quarter revenue growth of 18% pales in comparison to competitors like Amazon and Meta, which reported growth rates of 24% and 26%, respectively, indicating market share pressures.
- Future Growth Expectations: Although analysts anticipate The Trade Desk's adjusted earnings to grow at 15% annually through 2027, the rise of generative AI tools is expected to slow open internet ad spending from 25% in 2024 to 5% by 2028, potentially impacting its long-term growth prospects.
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- Capital Market Competition: Currently, companies like OpenAI and Anthropic are also vying for entry into the capital markets, highlighting the fierce competition among large capital-intensive firms for IPOs, and the merger of SpaceX and xAI could enhance their market attractiveness in this context.
- Investor Confidence: Although the market remains cautious about mergers involving Elon Musk's companies, analysts believe that such a merger could provide these firms with greater resource and capital liquidity, helping them achieve better valuations ahead of their IPOs.
- Technological Integration Potential: If SpaceX and xAI successfully merge, it could create a powerful technological ecosystem that leverages AI to enhance innovation in aerospace and transportation, thereby gaining a competitive edge in future market dynamics.
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The Trade Desk: A Value Investment Opportunity
- Market Share Competition: Although Amazon has captured some market share in the advertising space, The Trade Desk remains a top partner, demonstrating its ability to maintain stability in a highly competitive environment.
- Growth Potential: The Trade Desk's revenue rose 18% last quarter, which, while slower than previous growth rates, still exceeds the market's average annual return of 10%, with a projected 16% revenue growth for 2026, continuing to outperform the market.
- Valuation Appeal: The Trade Desk's stock trades at a dirt-cheap 13 times forward earnings, compared to the S&P 500's 22.2 times, highlighting its value investment potential as a growth stock, attracting investors seeking undervalued opportunities.
- Investment Recommendation: Despite not being included in Motley Fool's current best stock picks, The Trade Desk's ongoing growth in the advertising market and low valuation make it a potential choice for investors looking to outperform the S&P 500 in 2026.
See More
The Trade Desk: Intersection of Value and Growth Investing
- Market Performance Potential: After an 80% decline, The Trade Desk's stock has entered value investing territory, with expectations to outperform the S&P 500 in 2026, prompting investors to buy shares while they are still cheap.
- Advertising Platform Advantage: As a buy-side ad platform, The Trade Desk helps clients place ads in optimal internet locations; despite competition from Amazon, it continues to grow, with an 18% revenue increase last quarter.
- Future Growth Expectations: Wall Street analysts project a 16% revenue growth for The Trade Desk in 2026, which, although slower than previous rates, still exceeds the market's average annual return of 10%, indicating its competitive strength.
- Valuation Attractiveness: The Trade Desk's current price-to-earnings ratio stands at 13 times, significantly lower than the S&P 500's 22.2 times, presenting a rare opportunity for investors to acquire a double-digit growth stock at a discount.
See More
The Trade Desk Stock Hits Historical Low After Sell-Off
- Significant Price Decline: The Trade Desk's stock has plummeted nearly 80% from its all-time highs, despite a remarkable 900% increase over the past decade, indicating a market pessimism regarding its future growth potential with a current market cap of $13 billion.
- Slowing Revenue Growth: The company's revenue growth rate of 18% in Q3, while above Wall Street's 16% expectation, marks the lowest level in recent years, reflecting intensified competition and a trend of clients moving ad placements in-house.
- Increased Competitive Pressure: The Trade Desk faces competition from companies like Amazon, as clients shift to in-house advertising, resulting in a loss of market share and impacting the company's growth trajectory.
- Emerging Investment Opportunity: Despite the significant stock price drop, The Trade Desk trades at a forward P/E ratio below 15, with expectations of continued growth in the coming years, making it a compelling rebound investment opportunity worth considering.
See More
Three Resilient Stocks to Consider
- Qualcomm's Market Performance: Qualcomm (QCOM) has seen a 23% decline in its stock price since early January; however, despite challenges from memory chip shortages, demand for its high-performance processors remains strong, and as memory manufacturers recover, Qualcomm is expected to increase shipments, improving market performance.
- Remitly's Growth Potential: Remitly Global (RELY) successfully facilitated $19.5 billion in transfers in Q3 last year, a 35% year-over-year increase, generating $419.5 million in revenue with EBITDA of $61.2 million, up 29%, and analysts expect this growth momentum to continue through 2028, showcasing its strong competitive position in the international payments market.
- The Trade Desk's Value Recovery: The Trade Desk (TTD) has been impacted by the overall market downturn, but its revenue is projected to grow by 16% in 2023, with a current P/E ratio of only 12 times, indicating investment value, as the market has yet to recognize its necessity.
- Market Environment Challenges: While the overall market faces uncertainty, stocks like Qualcomm, Remitly, and The Trade Desk demonstrate strong resilience, suggesting that investors may consider these potential stocks for long-term gains amid market volatility.
See More
The Trade Desk Stock Plummets but Remains Undervalued
- Significant Stock Decline: The Trade Desk's stock has plummeted 81% from its record high, currently trading at $27, yet Wall Street analysts view it as deeply undervalued with a median target price of $50, indicating an 85% upside potential.
- Advantage of Independent Business Model: As a demand-side platform (DSP), The Trade Desk's independence helps it avoid conflicts of interest associated with media ownership, encouraging more publishers to share data, which enhances the effectiveness of its advertising measurement tools, particularly in the open internet advertising space.
- Increased Competitive Pressure: While The Trade Desk shows strong performance in connected TV and off-site retail advertising, its third-quarter revenue growth of 18% pales in comparison to competitors like Amazon and Meta, which reported growth rates of 24% and 26%, respectively, indicating market share pressures.
- Future Growth Expectations: Although analysts anticipate The Trade Desk's adjusted earnings to grow at 15% annually through 2027, the rise of generative AI tools is expected to slow open internet ad spending from 25% in 2024 to 5% by 2028, potentially impacting its long-term growth prospects.
See More
Discussion on Potential Merger Between SpaceX and xAI
- Merger Prospects: The potential merger between SpaceX and xAI has garnered market attention, particularly with SpaceX's anticipated IPO in 2026, as this merger could attract investor interest and enhance the IPO's appeal.
- Capital Market Competition: Currently, companies like OpenAI and Anthropic are also vying for entry into the capital markets, highlighting the fierce competition among large capital-intensive firms for IPOs, and the merger of SpaceX and xAI could enhance their market attractiveness in this context.
- Investor Confidence: Although the market remains cautious about mergers involving Elon Musk's companies, analysts believe that such a merger could provide these firms with greater resource and capital liquidity, helping them achieve better valuations ahead of their IPOs.
- Technological Integration Potential: If SpaceX and xAI successfully merge, it could create a powerful technological ecosystem that leverages AI to enhance innovation in aerospace and transportation, thereby gaining a competitive edge in future market dynamics.
See More
The Trade Desk: A Value Investment Opportunity
- Market Share Competition: Although Amazon has captured some market share in the advertising space, The Trade Desk remains a top partner, demonstrating its ability to maintain stability in a highly competitive environment.
- Growth Potential: The Trade Desk's revenue rose 18% last quarter, which, while slower than previous growth rates, still exceeds the market's average annual return of 10%, with a projected 16% revenue growth for 2026, continuing to outperform the market.
- Valuation Appeal: The Trade Desk's stock trades at a dirt-cheap 13 times forward earnings, compared to the S&P 500's 22.2 times, highlighting its value investment potential as a growth stock, attracting investors seeking undervalued opportunities.
- Investment Recommendation: Despite not being included in Motley Fool's current best stock picks, The Trade Desk's ongoing growth in the advertising market and low valuation make it a potential choice for investors looking to outperform the S&P 500 in 2026.
See More
The Trade Desk: Intersection of Value and Growth Investing
- Market Performance Potential: After an 80% decline, The Trade Desk's stock has entered value investing territory, with expectations to outperform the S&P 500 in 2026, prompting investors to buy shares while they are still cheap.
- Advertising Platform Advantage: As a buy-side ad platform, The Trade Desk helps clients place ads in optimal internet locations; despite competition from Amazon, it continues to grow, with an 18% revenue increase last quarter.
- Future Growth Expectations: Wall Street analysts project a 16% revenue growth for The Trade Desk in 2026, which, although slower than previous rates, still exceeds the market's average annual return of 10%, indicating its competitive strength.
- Valuation Attractiveness: The Trade Desk's current price-to-earnings ratio stands at 13 times, significantly lower than the S&P 500's 22.2 times, presenting a rare opportunity for investors to acquire a double-digit growth stock at a discount.
See More
The Trade Desk Stock Hits Historical Low After Sell-Off
- Significant Price Decline: The Trade Desk's stock has plummeted nearly 80% from its all-time highs, despite a remarkable 900% increase over the past decade, indicating a market pessimism regarding its future growth potential with a current market cap of $13 billion.
- Slowing Revenue Growth: The company's revenue growth rate of 18% in Q3, while above Wall Street's 16% expectation, marks the lowest level in recent years, reflecting intensified competition and a trend of clients moving ad placements in-house.
- Increased Competitive Pressure: The Trade Desk faces competition from companies like Amazon, as clients shift to in-house advertising, resulting in a loss of market share and impacting the company's growth trajectory.
- Emerging Investment Opportunity: Despite the significant stock price drop, The Trade Desk trades at a forward P/E ratio below 15, with expectations of continued growth in the coming years, making it a compelling rebound investment opportunity worth considering.
See More
