Marvell completes memory interoperability testing for CXL controllers
Tuesday, The Trade Desk shares (NASDAQ:TTD) received an upgrade from CFRA, with analyst Angelo Zino elevating the stock’s rating from Hold to Buy and maintaining a price target of $97.00. Zino cites a valuation that has become "extremely enticing" following a significant decline in share price, stating that the company’s stock is trading at its lowest level since its initial public offering. According to InvestingPro data, TTD currently trades at a P/E ratio of 77x, with analyst targets ranging from $49 to $155, suggesting significant market uncertainty about the stock’s fair value.
The Trade Desk, a prominent player in the digital advertising space, has seen its shares fall by over 50%, a drop that Zino believes has largely factored in the market’s concerns. InvestingPro data confirms this decline, showing a 46.4% drop over the past six months and a year-to-date decline of 49.5%. Despite recent execution issues and macroeconomic fears, Zino notes that the company’s growth rates and margins remain healthy, supported by an impressive gross profit margin of 80.7%. He acknowledges a slowdown in growth rates to 15%-20% in 2025, marking the slowest pace in eight years, excluding the pandemic period.
Zino kept the firm’s earnings per share (EPS) estimates for 2025 and 2026 steady at $1.81 and $2.16, respectively. He justifies the $97 price target with a price-to-earnings (P/E) ratio of 45 times the projected 2026 EPS, which is above the average of The Trade Desk’s peers. This reflects the company’s potential for growth, market share gains, and high customer retention rates. The company maintains strong financial health with more cash than debt on its balance sheet and robust liquidity metrics, as highlighted by two of the 18+ available InvestingPro Tips.
Despite the deceleration in growth, CFRA believes The Trade Desk is poised to benefit from several growth drivers. These include the continued rise of connected TV (CTV), expansion of its international business, and opportunities within the growing retail media sector. The company’s revenue grew 25.6% in the last twelve months, and Zino anticipates that The Trade Desk will outperform the digital advertising market by 1.5 to 2 times through 2026, bolstered by the trend towards more ad-supported options. For deeper insights into TTD’s growth potential and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, The Trade Desk has been the focus of several analyst updates and strategic developments. Citi analysts have maintained a Buy rating on The Trade Desk, adjusting their price target to $70 from a previous $108, citing a competitive environment and challenges with the rollout of the Kokai platform. Meanwhile, RBC Capital Markets has lowered its price target to $100 from $120 but maintained an Outperform rating, noting confidence in the company’s long-term strategy despite recent headwinds. Truist Securities has also maintained a Buy rating with a $130 price target, expressing optimism about the company’s market position and dismissing concerns over competition from Amazon (NASDAQ:AMZN).
Additionally, Stifel analysts reaffirmed a Buy rating and a $122 target, emphasizing the importance of appointing a new Chief Operating Officer to support The Trade Desk’s growth. The company’s management has highlighted the strategic significance of this role, particularly in scaling operations and enhancing leadership. Despite a challenging environment, The Trade Desk’s robust performance in the connected TV space and its strong relationships with advertising agencies continue to be recognized by analysts. These developments underscore the company’s efforts to navigate industry challenges while positioning itself for future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.