According to TheFly, HSBC noted that Trade Desk is staring at an increasingly competitive operating environment across the advertising technology supply chain in the middle of AI-accelerated structural shifts away from the open web.

  • Morgan Stanley lowered its price target on the stock to $13 from $26 and keeps an ‘Equal Weight’ rating on the shares.
  • The company announced revenue guidance of at least $650 million for the third quarter, which fell short of the consensus estimate of $670.88 million.
  • The firm highlighted that customer retention remained over 95% during the quarter, as it has for over a decade.

Shares of Trade Desk (TTD) were in the spotlight on Monday after analysts expressed skepticism following the company’s second-quarter (Q2) results.

Trade Desk announced revenue of $715.06 million in Q2 compared to an estimated $751.35 million, according to Fiscal.ai. Adjusted earnings per share (EPS) came in at $0.34 versus an estimated $0.4.

For the third quarter, the company announced revenue guidance of at least $650 million, which fell short of the consensus estimate of $670.88 million. It guided for earnings before interest, tax, depreciation, and amortization (EBITDA) of approximately $160 million. This too fell short of the consensus estimate of $174.40 million.

However, the firm highlighted that customer retention remained over 95% during the quarter, as it has for over a decade.

Wall Street Responds To TTD’s Q2

According to TheFly, HSBC analyst Mohammed Khallouf downgraded Trade Desk to ‘Reduce’ from ‘Hold' and lowered the price target by 50% to $10. 

HSBC noted that the company reported a "dismal" Q2 result, with a "sizable miss and guidance shock.”

The firm noted that Trade Desk is staring at an increasingly competitive operating environment across the advertising technology supply chain in the middle of AI-accelerated structural shifts away from the open web.

Meanwhile, Morgan Stanley lowered its price target on Trade Desk to $13 from $26, while keeping an ‘Equal Weight’ rating on the shares. The firm noted that pressure from counterparties, customers, and competitors seems to intensify as Trade Desk results rapidly descend into year-over-year declines.

CEO Says Q2 Didn’t Meet The Firm’s Standard

Earlier, CEO Jeff Green had highlighted that Q2 “did not meet the standard we set for ourselves, but it has reinforced our belief that we are focused on the right opportunities for the future.”

“Marketers are navigating a complex environment, but complexity increases the value of decisioning, measurement, and AI. We have a clear understanding of the factors that impacted our performance, and we are taking decisive action to strengthen our execution, upgrade our platform, and sharpen our focus on the areas where we can create the greatest value,” he said.

What Retail Thinks Of TTD

On Stocktwits, retail sentiment continued to trend in the ‘extremely bullish’ territory over the past 24 hours amid high retail chatter.

Stocktwits users opined that the stock could be a value buy at these levels.

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TTD shares are down over 60% this year.

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