The Trade Desk stock rating downgraded to Neutral by BTIG on growth concerns

Investing.com - BTIG downgraded The Trade Desk (NASDAQ:TTD) from Buy to Neutral following the company’s second-quarter earnings report, citing concerns about the company’s growth trajectory. The company, currently valued at $26.91 billion, has maintained a robust revenue growth of 23.18% over the last twelve months, according to InvestingPro data.

The research firm pointed to evidence suggesting that the anticipated turnaround driven by the Kokai platform is not materializing as expected. BTIG also expressed uncertainty regarding the macroeconomic environment, agency landscape, recovery timeline, and The Trade Desk’s ability to return to growth rates exceeding 20%.

The downgrade comes after The Trade Desk shares fell more than 30% in after-hours trading, which BTIG acknowledged partially reflects the headwinds and uncertainties facing the company.

BTIG analysts raised concerns about The Trade Desk’s ability to protect itself from in-house migration and total addressable market compression without evidence of successful execution on direct brand initiatives.

The research firm now applies a multiple of 19 times 2026 EBITDA, more closely aligned with the medium-term growth rate they project for the company, suggesting The Trade Desk may struggle to recapture its previous valuation premium.

In other recent news, The Trade Desk reported a 19% revenue growth in its most recent quarter, surpassing prior guidance and Wall Street expectations. However, the company provided a cautious outlook, with management indicating a sequential slowdown to 14% reported growth and 18% excluding political factors for the upcoming quarter. RBC Capital noted these "solid results" but lowered its price target from $100 to $90, maintaining an Outperform rating. Guggenheim also reduced its price target to $75 while keeping a Buy rating, reflecting concerns over the sequential slowdown. Truist Securities reiterated a Buy rating with a $100 price target, despite expressing disappointment over the company’s in-line third-quarter guidance. Meanwhile, BofA Securities downgraded The Trade Desk from Buy to Underperform, citing concerns over competitive pressures and the company’s ability to sustain its long-term growth trajectory. Benchmark maintained a Hold rating, highlighting potential revenue impacts from tariff pressures. These developments underscore the mixed analyst sentiment surrounding The Trade Desk’s future performance amid evolving market conditions.

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