Is Trade Desk (TTD) Undervalued After a 67% Slide? A Fresh Look at Its Current Valuation

Trade Desk (TTD) has been under the spotlight lately as the stock continues to face pressure. With investor attention focused on its recent performance, questions are swirling about what comes next for the digital advertising platform.

See our latest analysis for Trade Desk.

It has been a tough year for Trade Desk shareholders, with the stock’s share price sliding nearly 67% since January and a one-year total shareholder return of -69%. While a weak 30-day share price return hints at fading momentum, these moves reflect ongoing volatility and shifting investor sentiment around digital advertising’s growth outlook.

If Trade Desk’s recent ups and downs have you rethinking your approach, now is a perfect moment to broaden your search and discover fast growing stocks with high insider ownership

After such a steep decline and a price well below analyst targets, is Trade Desk currently undervalued and poised for a rebound, or is the market already accounting for the company’s future growth potential?

Most Popular Narrative: 37.3% Undervalued

With Trade Desk’s last close at $39.11 and a narrative fair value of $62.33, the narrative consensus points to a large gap between today’s share price and what analysts expect as fair value. Investors are left wondering if recent pessimism has truly gone too far, or if there is more pain to come for this digital ad innovator.

The continued rapid shift of ad spend from linear TV to connected TV (CTV) is driving significantly faster growth for Trade Desk's highest-margin channel. Deepened relationships with leading CTV and streaming content partners (Disney, Netflix, Roku, LG, etc.) position Trade Desk to capture an outsized share of the expanding premium digital video ad market, which should accelerate revenue and earnings growth as CTV penetration increases globally.

Read the complete narrative.

Want to know what’s fueling the optimism behind that hefty fair value? It’s not just about ad spend trends. There is a key financial lever and a future profit multiple that buck the sector’s norms. The full narrative reveals which earnings assumptions could set Trade Desk apart. Will they hold up? Find out what drives the math behind that valuation.

Result: Fair Value of $62.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, potential challenges such as intensified competition from industry giants and Trade Desk’s reliance on large clients could threaten its current growth path.

Find out about the key risks to this Trade Desk narrative.

Another View: Multiples Tell a Cautionary Story

While the consensus fair value suggests Trade Desk is undervalued, a look at its price-to-earnings ratio offers a more cautious take. The company’s 43.1x ratio is much higher than both the peer average of 25.3x and the US Media industry’s 16.4x. It is also well above the fair ratio of 27.8x. This sizable gap highlights real valuation risk. Could the share price have further to fall if the market tunes its optimism?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Trade Desk Narrative

If you see things differently or want to crunch the numbers on your own, you can easily shape your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Trade Desk.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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