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Tuesday - Wolfe Research has revised its price target for The Trade Desk (NASDAQ:TTD) shares, reducing it from $100 to $60, while maintaining an Outperform rating. The stock has experienced significant pressure, declining over 60% year-to-date according to InvestingPro data, though the company maintains a GOOD financial health score with strong profitability metrics. Shweta Khajuria, an analyst at Wolfe Research, anticipates that The Trade Desk will surpass revenue expectations for the first quarter by a low single-digit percentage, attributing this to a conservative guidance. EBITDA is also expected to beat estimates, ranging from a low to mid single-digit percentage.
Khajuria's report suggests that second-quarter guidance may align with or fall below current Street projections due to prevailing macroeconomic uncertainties. Consequently, Wolfe Research has adjusted its full-year 2025 estimates downward by a low single-digit percentage and set a new price target of $60, down from the previous $90. Despite recent challenges, InvestingPro data shows The Trade Desk maintains impressive fundamentals with an 80.69% gross profit margin and 25.63% revenue growth over the last twelve months. The firm's and Street's estimates suggest a 17% year-over-year growth in Q1 revenue and an EBITDA of $145 million to $149 million, indicating margins of 25.3% to 25.9%.
Despite the reduced price target, Wolfe Research believes that The Trade Desk’s fourth-quarter performance was an outlier, considering the company’s consistent track record. The analyst highlights potential benefits from The Trade Desk’s expanding partnership with Roku (NASDAQ:ROKU) and the ongoing growth in connected TV (CTV) as positive factors for the company in 2025.
The firm also notes that The Trade Desk could face risks from a potential reduction in advertising spending, especially since its business is heavily weighted towards brand advertising. The Trade Desk is expected to report its quarterly results on May 7th. For deeper insights into TTD's valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company's financial health and market position among 1,400+ top US stocks. Historically, the company has outperformed its own revenue and EBITDA guidance in nine of the past ten quarters.
In the period since The Trade Desk's last earnings report on February 12th, its shares have underperformed the S&P 500 by 27 points, resulting in mixed sentiments among investors ahead of the upcoming earnings announcement. Wolfe Research bases its expectation of a "Beat and Lower" outcome on advertising checks, intra-quarter data, and sensitivity analysis of their model.
In other recent news, The Trade Desk has been the focus of several analyst reports highlighting its current market dynamics and future prospects. Jefferies analyst James Heaney revised the company's price target to $75 from $120, maintaining a Buy rating. This adjustment reflects increased competition, particularly from Amazon (NASDAQ:AMZN), but Heaney remains optimistic about The Trade Desk's long-term growth potential. BofA Securities also reaffirmed a Buy rating with a $130 target, citing confidence in The Trade Desk's ability to sustain growth despite competition from Amazon's Demand-Side Platform.
CFRA upgraded The Trade Desk's rating from Hold to Buy, with a price target of $97, emphasizing the company's attractive valuation and healthy growth rates. Analyst Angelo Zino noted a slowdown in growth rates but highlighted potential benefits from the rise of connected TV and international expansion. Citi maintained a Buy rating and a $70 target, acknowledging The Trade Desk's strong position in the connected TV market despite competitive pressures.
RBC Capital Markets lowered its price target to $100 while maintaining an Outperform rating. Analyst Matthew Swanson noted that recent challenges were strategic decisions aimed at securing long-term market share gains. The Trade Desk management expressed confidence in their strategy, addressing concerns about competition and market conditions. Overall, analysts continue to express confidence in The Trade Desk's market position and growth potential.
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