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Investing.com -- Jefferies downgraded digital advertising platform The Trade Desk (NASDAQ:TTD) to Hold from Buy given a sharper-than-expected slowdown in revenue growth amid growing competition and management turnover that could weigh on performance.
The brokerage said second-quarter revenue grew 19% from a year earlier, down from 25% in the first quarter and short of the 22% plus pace analysts had expected.
The company forecast at least 14% growth for the third quarter, which Jefferies described as weak given generally solid results from other advertising firms.
Jefferies said the slowdown could reflect either a softer connected TV advertising market or a loss of market share, and noted unusually weak seasonal trends in the second quarter.
The firm pointed to several factors behind the deceleration, including increased competition from Amazon (NASDAQ:AMZN), which recently struck content deals with Roku (NASDAQ:ROKU) and Walt Disney (NYSE:DIS); advertisers pulling forward budgets into the first quarter to avoid tariff-related uncertainty; and disruption from senior management changes and a major reorganization.
Jefferies also said the rollout of the company’s new Kokai platform has been slower than expected.
The brokerage cut its 2025 and 2026 adjusted EBITDA estimates by 1% and 6%, respectively, and lowered its price target to $50 from $95, implying 17 times expected 2026 earnings before interest, tax, depreciation and amortization, down from a prior 26 times.
It now forecasts annual revenue growth of 17% in 2025 and 18% in 2026, with limited margin expansion.
Jefferies said it sees no clear catalyst in the near term to reverse the slowdown, though it expects the 2026 U.S. election cycle and more programmatic streaming TV inventory to support growth over time.