TLDR
- Jefferies downgraded The Trade Desk (TTD) from Buy to Hold, cutting price target to $50 from $100
- Stock plunged 39% on Friday following earnings report, despite beating revenue estimates
- Revenue growth decelerated to 19% in Q2 from 25% in Q1, with Q3 guidance of just 14%
- CFO Laura Schenkein announced immediate departure after over a decade with the company
- Multiple analyst downgrades followed the earnings report, citing growth concerns and valuation issues
The Trade Desk stock crashed 39% on Friday following its quarterly earnings report. The programmatic advertising company delivered solid results but spooked investors with decelerating growth guidance.
The company reported Q2 revenue of $694 million, up 19% year-over-year. This beat analyst expectations of $682 million and exceeded the company’s own forecast.
Adjusted earnings per share came in at $0.41, representing a 5% increase. The figure matched Wall Street’s expectations of $0.42 almost exactly.
$TTD Earnings:
– Revenue: $694 million
– Non-GAAP diluted earnings per share: $0.41
– Strong Customer Retention: Customer retention remained over 95% during the second quarter, as it has for the past 11 consecutive years.
– The Company used $261 million of cash to repurchase its… pic.twitter.com/XmOCbAVSX8— AlphaSense (@AlphaSenseInc) August 7, 2025
Despite the beat on revenue, investors focused on troubling growth trends. Revenue growth slowed from 25% in Q1 to 19% in Q2, marking consecutive quarters of deceleration.
The company’s Q3 guidance made matters worse. Management projected revenue of $717 million, representing just 14% growth.
CFO Laura Schenkein tried to provide context for the weak guidance. She noted that last year’s Q3 benefited from political advertising during the presidential election cycle.
Excluding political spending, Q3 revenue would show 18% growth. This explanation failed to calm nervous investors who had already begun selling.
Analyst Downgrades Pour In
Jefferies led the charge with a downgrade from Buy to Hold. The investment bank slashed its price target to $50 from $100, citing long-term growth concerns.
The firm pointed to limited upside in the company’s valuation multiple. Jefferies lowered its fiscal 2025 and 2026 adjusted EBITDA estimates by 1% and 6% respectively.
Other analysts joined the bearish chorus. CFRA cut its price target to $72 from $110 while maintaining a Buy rating.
BTIG downgraded the stock from Buy to Neutral. The firm expressed concerns about the company’s growth trajectory and platform effectiveness.
BofA Securities took the harshest stance, downgrading to Underperform with a $55 price target. The bank cited competitive pressures and sustainability questions around future growth.
Leadership Changes Add Uncertainty
The Trade Desk announced CFO Laura Schenkein would step down immediately. The departure came after more than a decade with the company.
Alex Kayyal will replace Schenkein as the new chief financial officer. Schenkein will remain through year-end to ensure a smooth transition.
CEO Jeff Green praised Schenkein’s contributions to the company’s success. He indicated the departure was amicable with no underlying issues.
Investors typically dislike C-suite changes, especially when unannounced. The timing with weak guidance amplified concerns about the company’s direction.
Competition concerns also weighed on the stock. Reports in June suggested marketers were shifting connected TV ad spend from The Trade Desk to Amazon.
Amazon allegedly attracted advertisers with discounted pricing and Prime Video reach. The e-commerce giant’s access to live sports content provided additional appeal.
CEO Green addressed these concerns directly during the earnings call. He emphasized The Trade Desk’s independence as a key differentiator from Amazon.
Green noted Amazon has conflicts of interest promoting its own digital ad real estate. The Trade Desk doesn’t own media properties and remains neutral.
The CEO characterized Amazon more as a potential partner than competitor. He suggested the companies operate in different market segments with minimal overlap.
The stock’s premium valuation made the decline more severe. Even after Friday’s crash, The Trade Desk trades at 66 times earnings compared to the S&P 500’s 29 multiple.
High-multiple stocks experience greater volatility when growth disappoints. Fair-weather investors quickly abandon positions at the first sign of trouble.
The Trade Desk has experienced similar selloffs throughout its public history. The stock has fallen 25% or more on at least 10 separate occasions since its 2016 IPO.
Each previous decline proved temporary as the company’s execution won back investor confidence. The stock has gained 1,690% since going public, even after Friday’s drop.
Current trading metrics show the stock at $54.19 with a $27 billion market cap. Daily volume reached 599,648 shares, well below the average of 12.5 million shares.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
