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Investing.com - Benchmark maintained its Hold rating on The Trade Desk (NASDAQ:TTD), currently trading at $53.98, as the advertising technology company faces potential headwinds from tariff pressures. According to InvestingPro data, the company maintains strong fundamentals with an impressive 80.11% gross profit margin, though it trades at a relatively high P/E ratio of 65.4x.
The research firm highlighted that while The Trade Desk has historically benefited from its large brand exposure, current tariff conditions may create near-term challenges for the company. Benchmark pointed to a two-point sequential drop in domestic billings after five consecutive quarters at 88%, suggesting a possible low double-digit revenue impact.
Benchmark noted that other ad tech companies have largely avoided tariff-related pressures, but explained those companies typically have greater exposure to small and medium-sized business customers rather than large brands.
The firm partially attributed The Trade Desk’s growth deceleration this year to natural mean reversion toward U.S. digital industry growth rates. Benchmark’s 2025 estimates assume a naturally decelerating two-year stack revenue trend for the remainder of the year, though it acknowledged this might be conservative for the fourth quarter.
Benchmark also observed that The Trade Desk’s recent CFO change, bringing in Alex Kayyal to replace Laura Schenkein, likely aims to add experience in managing both a diverging growth trajectory and "uncharted waters ahead" including AI programmatic democratization.
In other recent news, The Trade Desk reported slightly higher second-quarter 2025 results and provided in-line third-quarter guidance, which Truist Securities found disappointing. Despite this, Truist has reiterated its Buy rating and maintains a price target of $100. BofA Securities downgraded The Trade Desk from Buy to Underperform, citing concerns about growth after the company missed guidance for the first time in its history during the fourth quarter of 2024. This downgrade came with a significant reduction in the price target to $55. RBC Capital also adjusted its price target to $90, down from $100, although it maintained an Outperform rating. RBC noted that while The Trade Desk delivered a revenue beat of 1.3%, it fell short of elevated investor expectations. Guggenheim lowered its price target to $75 from $90 but kept a Buy rating, highlighting the company’s 19% revenue growth, which surpassed prior guidance and Street expectations. However, Guggenheim pointed out that management’s outlook suggests a sequential slowdown in growth. Lastly, TD Cowen raised its price target to $259 from $249, maintaining a Buy rating, following a quarter that exceeded expectations with Q1:F26 bookings surpassing the guidance range.
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