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Investing.com -- The Trade Desk (NASDAQ:TTD) shares nosedived at the market open on Friday after the company’s third-quarter guidance raised concerns about slowing growth and after CEO Jeff Green cautioned that ongoing tariff uncertainty was weighing on some of the world’s largest advertisers.
Shares in the advertising technology were down around 37% at $55.92 as of 09:50 ET (13:50 GMT).
The company posted adjusted earnings of 41 cents per share for the three months ended June 30, a cent ahead of analysts’ estimates.
Revenue rose to $694 million, topping the average forecast of $685.5 million.
Trade Desk said it expects at least $717 million in revenue for the third quarter, marginally above Wall Street’s projection of $716.2 million.
Bank of America analysts noted that the company’s third-quarter outlook "implies a deceleration in underlying growth." This is especially concerning "against the backdrop of robust advertising growth (and absolute dollars) being reported by many of the largest walled gardens."
"While we continue to believe TTD can be a double-digit topline grower, we believe it is challenging to justify the premium multiple it has historically received," analysts led by Jessica Reif Ehrlich wrote.
The bank double-downgraded the stock to Underperform from Buy and more than halved its price target to $55 from $130.
Changing trade policies are prompting concerns about weaker ad spending, with companies delaying new campaigns in tariff-affected sectors.
Trade Desk’s focus on large global advertisers has made it more exposed to these pressures than rivals that rely more on small and mid-sized clients, CEO Jeff Green said Thursday.
Alongside the results, The Trade Desk also announced a leadership shakeup, appointing board member Alex Kayyal as chief financial officer effective August 21.
Kayyal previously held senior roles at Salesforce (NYSE:CRM) and Lightspeed Venture Partners.
"Q2 results were better than Street models, but not against higher expectations following Meta/Google/Reddit results," Stifel analysts said in a post-earnings note. "The Q3 outlook was in-line and the bigger driver of the after-hours move, in our view."
"All of this was accompanied by the announced CFO transition, which doesn’t help sentiment," they added.
Kayyal will replace Laura Schenkein, who is stepping down after more than a decade with the company but will remain through year-end to assist with the transition.
Stifel analysts said the main debate centers on competitive pressure from Amazon’s DSP, which The Trade Desk views as not posing a threat, adding that the latest results will likely reinforce that view.
The broker trimmed its price target on the stock to $90 from $95.
(Additional reporting by Vahid Karaahmetovic.)