Thu Apr 17 14:50:00 UTC 2025: **The Trade Desk (TTD) Stock Plunges, But Analysts See Potential for Rebound**
NEW YORK, NY – Shares of The Trade Desk (TTD), a leading programmatic advertising company, have plummeted nearly 60% in 2025, currently trading at $50. Despite this sharp decline, analysts at Trefis remain optimistic about the company’s long-term prospects.
While acknowledging the significant risk associated with individual stock investments, Trefis highlights TTD’s position as the only pure-play giant in programmatic advertising, contrasting it with the less focused efforts of tech giants like Google, Amazon, and Meta. The company reported a 22% surge in revenue last quarter, maintaining strong growth and expanding operating margins. This performance suggests that the current low price might represent a compelling buying opportunity.
However, Trefis also cautions that TTD’s high valuation, with P/EBIT and P/E multiples at 63 and 69 respectively, needs careful consideration. While acknowledging that high valuations can persist, the analysts emphasize the importance of evaluating growth alongside valuation. Their analysis suggests that even with a significant multiple contraction, substantial revenue growth and margin expansion could still deliver strong returns. A model projecting 20% annual growth over three years and operating margin expansion from 17.5% to 25% indicates the potential for operating income exceeding $1 billion, even if multiples halve.
To mitigate risk, Trefis recommends its High-Quality (HQ) portfolio, a diversified collection of 30 stocks that have outperformed the S&P 500 since inception, achieving returns exceeding 91%. The HQ portfolio is highlighted as a less volatile alternative for investors seeking exposure to the market’s upside. The article concludes by emphasizing that the views expressed are those of the authors and not necessarily Nasdaq, Inc.
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