TTD: Future Share Strength Will Build On AI And Buyback Execution

Analysts have nudged their average price target for Trade Desk modestly lower to about $82, reflecting a blend of cautious resets around competitive and regulatory headwinds, continued confidence in improving ad demand, Kokai driven execution, and the potential for revenue reacceleration into 2026.

Analyst Commentary

Street research around Trade Desk has become more polarized, with most firms trimming price targets but maintaining constructive views on execution and the multi year growth algorithm, while a smaller group is signaling greater caution on near term growth and competitive pressures.

Bullish Takeaways

• Bullish analysts view the recent beat and raise quarter as evidence that underlying ad demand is improving and that Trade Desk can sustain core growth rates near the 20 percent range exiting the year.
• Several reports highlight Kokai and newer products like Audience Unlimited as key differentiators that are already driving better advertiser outcomes and should support revenue reacceleration into 2026.
• Some bullish analysts argue that current estimates are extremely de risked and the stock remains depressed relative to its long term opportunity, creating an attractive risk or reward skew if growth re accelerates.
• Despite modest target cuts, constructive views emphasize that competitive fears and slowing growth concerns are overblown, with limited perceived downside to the shares from current levels.

Bearish Takeaways

• Bearish analysts point to mounting near term headwinds, including regulatory risk around sensitive verticals such as direct to consumer healthcare, which could weigh on campaign budgets and visibility.
• Intensifying competition from large platforms, including retail media players, is seen by some as making the operating environment more challenging and potentially delaying a clean reacceleration in revenue.
• Concerns around topline deceleration into 2025, combined with recent management changes and product pricing adjustments following customer feedback, have led some to frame the stock as a show me story.
• The recent downgrade to an underperform stance underscores skepticism that current execution will be sufficient to quickly restore prior growth multiples, keeping valuation under pressure until catalysts become more tangible.

What's in the News

• Intuit's SMB MediaLabs audiences are now available on The Trade Desk, giving advertisers privacy conscious access to millions of verified small and mid market business decision makers and expanding reach across CTV, audio, display, and digital out of home.
• The Trade Desk issued fourth quarter 2025 guidance calling for at least $840 million in revenue, indicating management's view of current demand trends and the company's ability to sustain double digit growth.
• The company expanded its equity buyback authorization by $500 million to a total of $2.411 billion and has already repurchased roughly 5.9 percent of shares under the current program. This reinforces management's stated focus on returning capital to shareholders.
• New product initiatives, including the planned launch of Audience Unlimited and Koa Adaptive Trading Modes, are intended to lower the cost and complexity of third party data, while using agentic AI to optimize bidding and campaign performance at scale.
• OpenAI is hiring to build an in house paid marketing platform for ChatGPT. This move could ultimately create a new walled garden ad channel and increase the competitive pressures facing independent demand side platforms such as The Trade Desk (ADWEEK).

Valuation Changes

• Fair Value Estimate remains unchanged at approximately $62.33 per share, indicating no material reassessment of long term intrinsic value.
• The discount rate is effectively unchanged at about 6.96 percent, reflecting a stable risk profile in the valuation model.
• Revenue growth is essentially flat at around 15.84 percent, signaling no meaningful shift in long term top line growth assumptions.
• The net profit margin is stable at roughly 18.78 percent, with no notable revision to long run profitability expectations.
• The future P/E remains unchanged at about 41.9 times, suggesting the valuation multiple outlook remains consistent with prior assumptions.