Service Stocks Underperform in Afternoon Trading
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: NASDAQ.COM
- Service Sector Decline: In afternoon trading on Monday, service stocks fell by 0.3%, with The Trade Desk Inc (TTD) and Darden Restaurants, Inc. (DRI) dropping 8.4% and 5.7% respectively, indicating a weakening trend that may affect investor confidence.
- ETF Performance Analysis: The iShares U.S. Consumer Services ETF (IYC), closely tracking service stocks, declined 0.4% on the day, although it is up 2.17% year-to-date, suggesting that short-term volatility may prompt investors to reassess their strategies.
- Materials Sector Dynamics: The materials sector also showed weakness, with an overall decline of 0.1%, as Builders FirstSource Inc. (BLDR) and Steel Dynamics Inc. (STLD) both fell by 3.1%, reflecting challenges faced by the industry that could impact profitability.
- ETF Tracking Performance: The Materials Select Sector SPDR ETF (XLB), associated with materials stocks, rose 0.3% on the day and is up 10.52% year-to-date, indicating that despite poor individual stock performance, the overall sector still holds some investment appeal.
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Analyst Views on TTD
Wall Street analysts forecast TTD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TTD is 59.68 USD with a low forecast of 39.00 USD and a high forecast of 90.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
25 Analyst Rating
15 Buy
9 Hold
1 Sell
Moderate Buy
Current: 31.870
Low
39.00
Averages
59.68
High
90.00
Current: 31.870
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.
Trade Desk CFO Departure Triggers Analyst Price Target Cuts
- Analyst Price Target Cuts: Rosenblatt analyst lowered Trade Desk's price target from $64 to $53 while maintaining a 'Buy' rating, citing the CFO's unexpected departure as a pressure point on the company's valuation.
- Increased Uncertainty: Truist analyst reduced the price target from $85 to $60, emphasizing the 'greater uncertainty' stemming from the CFO transition and adjusting their model accordingly.
- CFO Departure Impact: Trade Desk's CFO Alex Kayyal stepped down after just five months, creating uncertainty over a key operational role and affecting investor confidence.
- Market Reaction: Despite retail sentiment trending in the 'extremely bullish' territory, Trade Desk's shares have fallen 72% over the past 12 months, indicating market concerns about the company's future.
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The Trade Desk Shares Plummet After CFO Firing and Analyst Downgrades
- Executive Turmoil: The Trade Desk's announcement of CFO Alex Kayyal's firing led to a 4.7% drop in shares on Monday, with a cumulative decline of about 12% this week, reflecting market concerns over frequent executive turnover.
- Analyst Downgrades: Following Kayyal's dismissal, three firms—Citigroup, Truist, and Rosenblatt—lowered their price targets from $50 to $38, $85 to $60, and $64 to $53 respectively, exacerbating the market's pessimism regarding the company's future performance.
- Severe Market Reaction: The Trade Desk's stock has plummeted 76% from its all-time highs, now valued at $16 billion, indicating investor anxiety over revenue deceleration and increased competition, despite the company reaffirming its fourth-quarter financial guidance.
- Cautious Investor Sentiment: Although the current share price is relatively cheap at around 16 times 2026 adjusted earnings per share, frequent executive turnover and slowing revenue growth may lead conservative investors to wait for insights from the earnings call on February 25 before making decisions.
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