Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM Team, I am interested to get your thoughts on The Trade Desk (TTD) which has performed very poorly over the last 12 months. The last Market Matters opinion piece was back in March, where the stock price was sitting around $27. The stock has since dropped to $18 in a consistent downtrend. Is this a turnaround story or are there better places to direct the funds. Thanks, Mitch
Hi Mitch,
A well-timed question around a very frustrating stock. TTD makes money from earning a fee by helping advertisers and agencies buy and optimise digital advertising campaigns across the open internet using its programmatic advertising platform. However, the market has become increasing concerned with the AI risk:
At this stage the stocks cheap, trading on 10x for FY26, around 70% below its long-term valuation demonstrating the markets concern. The US$8.3bn company is forecast to generate US$3.2bn in revenue and deliver flat U$1.77 EPS in FY26.
It’s hard to get excited on this business which might still be firing well but could be on borrowed time. We’re in two minds on this holding. Just cut it, or hold our relatively low prevailing weighting for the potential of a turnaround (and add to it if/when that happens). We’ve chosen the latter for now, because the earnings are not that bad – it just needs to start showing some element of growth again. That said, we’ve been wrong to hold – should have cut it – it’s one of those stocks we’ve got too attached to given it was a very strong performer for us in the past.
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