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On Monday, Citi analysts revised their price target for The Trade Desk (NASDAQ:TTD) shares, lowering it to $70.00 from the previous $108.00, while still upholding a Buy rating for the company. The stock, currently trading at $53.94, has experienced significant pressure, declining over 49% in the past six months. According to InvestingPro analysis, the company maintains strong fundamentals with a "Good" financial health score. The adjustment follows insights gathered at the CTV Connect conference, which presented a mix of challenges and opportunities for The Trade Desk and the broader connected TV (CTV) advertising landscape.
Analysts noted an increasingly competitive environment for demand-side platforms (DSPs) and supply-side platforms (SSPs), which may complicate The Trade Desk’s path to billing recovery and its objective of achieving mid-20% revenue growth. Despite these challenges, the company has demonstrated robust performance with a 25.63% revenue growth in the last twelve months and maintains healthy profit margins above 80%. Concerns were also raised regarding the rollout of the Kokai platform and issues with OpenPath’s transparency. Additionally, the transition of advertising dollars from traditional linear TV to programmatic CTV appears to face obstacles, as linear and direct CTV buying remain integral to many advertiser and agency plans.
Despite the hurdles, Citi analysts believe that the market sentiment towards The Trade Desk has become overly negative. They argue that the company continues to be a formidable player in the CTV space and that the broader shift towards CTV will still benefit The Trade Desk’s growth prospects, albeit in a more competitive market. InvestingPro data reveals the stock is currently trading below its Fair Value, with 21 additional exclusive insights available to subscribers.
The revision in the price target reflects a new valuation multiple, which has been adjusted in light of the challenges identified. However, Citi maintains confidence in The Trade Desk’s competitive position and its ability to capitalize on the ongoing evolution of the CTV advertising sector. With analyst targets ranging from $49 to $155, investors seeking deeper insights can access comprehensive valuation analysis and real-time metrics through InvestingPro’s detailed research reports.
In other recent news, The Trade Desk has announced the appointment of Vivek Kundra as its new Chief Operating Officer, effective March 31st. Kundra, who previously served as the United States’ first Chief Information Officer, brings a wealth of experience from his roles in both government and the private sector. This strategic move is expected to enhance the company’s global operations and drive its operational excellence. Meanwhile, The Trade Desk recently reported a miss in its fourth-quarter 2024 guidance, marking the first time it failed to meet its quarterly expectations since going public. Analysts from Loop Capital have responded by lowering their price target to $101, citing a disappointing earnings report, but they maintained a Buy rating on the stock. Despite the earnings miss, both Truist Securities and Stifel have reiterated their Buy ratings, with price targets of $130 and $122, respectively, underscoring confidence in the company’s long-term growth potential. Truist analysts noted the company’s solid fundamentals and see the recent stock sell-off as an overreaction. JMP analysts also maintained a Market Outperform rating with a $115 target, highlighting The Trade Desk’s unique market position and upcoming AI forecasting product. These developments reflect ongoing confidence in The Trade Desk’s strategic direction and growth prospects.
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