Stock of the Week: The Trade Desk – What Is the Potential After a -50% YTD Performance?
By Steven Orlowski, CFP, CNPR - Orlowski Financial Counsel | April 24, 2025
After a brutal start to 2025, shares of The Trade Desk (NASDAQ: TTD) have plunged over 50% year-to-date, raising alarms among investors and analysts alike. Once a darling of the ad tech sector, The Trade Desk has seen its valuation slashed in response to mounting macroeconomic headwinds, slower digital advertising growth, and increased competitive pressure. But is this the end of the story—or the beginning of a compelling rebound?
Let’s break down what’s behind the decline, and what’s ahead for this programmatic advertising powerhouse.
What Went Wrong?
The Trade Desk’s rapid decline in 2025 is the result of a confluence of factors:
1. Digital Ad Slowdown
Digital advertising is still growing, but not at the torrid pace it did during the post-COVID boom. Major advertisers are pulling back spend amidst inflationary pressure, geopolitical uncertainty, and tighter corporate budgets.
2. Competitive Threats
Alphabet’s Google and Amazon’s advertising divisions have grown more aggressive, leveraging their ecosystems to lock in advertisers. Meanwhile, newer platforms with first-party data—like TikTok—are attracting marketers seeking measurable ROI.
3. Valuation Reset
Heading into 2025, TTD was trading at a lofty price-to-sales ratio over 20x—priced for perfection in a market that quickly turned unforgiving. As growth slowed, the premium multiple collapsed, dragging the stock down with it.
What’s Still Working for The Trade Desk?
Despite the downturn, The Trade Desk retains several long-term competitive advantages:
1. Leadership in Programmatic
The Trade Desk remains the leader in independent demand-side platforms (DSPs)—giving advertisers transparency and control over how they buy digital ad inventory. Its self-serve platform is still best-in-class.
2. UID 2.0 Adoption
Its push for a privacy-conscious alternative to cookies, known as Unified ID 2.0, has gained traction among publishers and advertisers, potentially positioning TTD as a key player in the post-cookie world.
3. CTV Growth
Connected TV (CTV) remains a bright spot. As advertisers shift from linear to digital video, TTD is well-positioned to capture share. Major streaming players increasingly use its platform to monetize inventory programmatically.
Financial Snapshot
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Market Cap (April 2025): ~$15 billion
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2024 Revenue: $1.95 billion (+16% YoY)
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EBITDA Margin: ~32%
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Cash Position: ~$1.3 billion, no debt
The company remains profitable, with strong free cash flow, a rarity in the ad tech space.
Analyst Sentiment: Divided but Hopeful
Some analysts have slashed price targets and downgraded the stock, but others are beginning to call TTD a “generational buying opportunity.” Key themes in bullish reports include:
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Undervalued relative to peers
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Still growing double-digits in revenue
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Strong secular trends in data-driven advertising
A common refrain: "The business is sound, the market is emotional."
The Bottom Line: Is Now the Time to Buy?
The Trade Desk’s -50% YTD performance may seem like a red flag, but to contrarian investors, it could signal an inflection point. With a lean balance sheet, long-term growth drivers like CTV and UID 2.0, and a best-in-class platform, the company remains a formidable player in ad tech.
However, short-term volatility may persist, especially if macro conditions worsen or ad budgets continue to shrink.
Investor takeaway: TTD is no longer priced for perfection—and that could be exactly the opportunity. For those with a long-term horizon and tolerance for risk, The Trade Desk might just be setting up for its next act.
Disclosure: The author does not hold a position in The Trade Desk at the time of writing. This article is for informational purposes only and does not constitute financial advice.
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