Key Stats for The Trade Desk Stock
- Price change for The Trade Desk stock Today: -5%
- $TTD Share Price as of Feb. 25: $25
- 52-Week High: $91
- $TTD Stock Price Target: $52
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What Happened?
The Trade Desk (TTD) stock tumbled almost 5% after the digital advertising platform issued disappointing first-quarter guidance despite beating Wall Street’s fourth-quarter expectations.
- The company reported Q4 revenue of $846.8 million, up 14.3% year-over-year and slightly ahead of the $841.9 million consensus.
- Adjusted earnings of $0.59 per share matched analyst estimates, while adjusted EBITDA of $400.3 million handily beat expectations by 6.4%.
- However, investors focused on the weak outlook. The Trade Desk guided Q1 revenue to “at least” $678 million, falling 1.5% short of the $688.1 million analysts expected.
- More concerning, the company’s Q1 EBITDA guidance of $195 million came in well below the $222.4 million consensus, signaling increased spending or margin pressure ahead.
- CEO Jeff Green attributed much of the weakness to ongoing challenges in two major verticals that together represent over 25% of the business.
- Consumer packaged goods companies and automakers have been cutting advertising budgets amid tariff uncertainty, inflationary pressures, and consumer spending headwinds.
- Green noted that when excluding these struggling categories, the company’s growth rate would have been at least 5 percentage points higher.
The CPG sector, in particular, has been under pressure. At a recent industry conference, major global brands discussed consumer pressure, slower volume recovery, and ongoing input cost volatility.
Auto companies have faced similar macro headwinds, with many choosing to slash marketing budgets rather than lay off employees during uncertain times.
Despite these near-term headwinds, Green emphasized the company’s strong long-term positioning.
The Trade Desk is heavily investing in AI capabilities through its Kokai platform, which now processes nearly 100% of client campaigns.
The company also launched several innovations, including Audience Unlimited, a new data marketplace product, and Deal Desk, an AI-powered tool for managing programmatic deals.
The company’s connected TV business continued to outpace overall growth, with video representing about 50% of total revenue in Q4.
Audio was the fastest-growing channel during the quarter.
Geographically, international markets grew faster than North America, with particular strength in Europe and Asia-Pacific.
For the full year 2025, The Trade Desk generated $2.9 billion in revenue, representing 18% year-over-year growth.
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What the Market Is Telling Us About The Trade Desk Stock
The decline in The Trade Desk stock reflects investor concerns about near-term deceleration in growth and the company’s ability to navigate a challenging advertising environment.
- The weak Q1 guidance suggests the CPG and auto weakness that emerged in Q2 2025 has not only persisted but may be intensifying in early 2026.
- More broadly, the market appears worried about competitive pressures in the demand-side platform space, particularly from Amazon’s DSP.
- However, Green pushed back strongly on this narrative, arguing that Amazon primarily sells its own inventory and lacks the objectivity that makes The Trade Desk valuable to advertisers.
- He emphasized that the company’s trust-based relationships and AI capabilities create a durable competitive moat.
The company’s organizational restructuring over the past year is still in early innings.
Management reorganized go-to-market teams around a brand-first approach, increased direct advertiser relationships, and eliminated overlapping coverage.
Joint Business Plans now account for over half of the business, with the pipeline more than doubling year-over-year.
These changes take time to show results but could drive acceleration once macro headwinds ease.
Green’s comments about supply-demand dynamics were particularly noteworthy.
He argued that more advertising inventory came to market in 2025 than in any prior year, creating a buyer’s market that favors The Trade Desk’s objective decisioning model.
Companies focused on “cheap reach” through walled gardens are struggling, while those using data-driven decisioning across the open internet are seeing better results.
The company expects full-year 2026 adjusted EBITDA margins to remain roughly flat with 2025 levels as it invests in infrastructure, AI capabilities, and the transition to owned data centers.
Management emphasized that these investments should position the company for improved leverage beyond 2026.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
