Investing.com — The Trade Desk reported second-quarter revenue slightly ahead of consensus and adjusted EBITDA of $271 million, beating guidance by about $10 million.<\/p>\n
Management credited the performance to Kokai, with roughly 70% of client spend now on the platform.<\/p>\n
Despite the results, Wedbush downgraded The Trade Desk (NASDAQ:TTD) to Neutral from Outperform in a note on Friday, cutting its price target to $68 per share, citing \u201crising competitive intensity (primarily versus Amazon (NASDAQ:AMZN) DSP)\u201d and concerns over its relationships with key agency partners and the long-term market size.<\/p>\n<\/p>\n
TTD shares have plunged more than 38% on Friday.<\/p>\n
Wedbush noted \u201cmultiple reports in recent months suggesting Amazon has more aggressively improved its DSP capabilities,\u201d with several marketers shifting budgets from The Trade Desk.<\/p>\n
Amazon\u2019s June integrations with Disney (NYSE:DIS) and Roku (NASDAQ:ROKU) opened access to premium CTV inventory, which Wedbush said \u201cvalidates the strength of its DSP and suggests The Trade Desk\u2019s value proposition could erode over time.\u201d<\/p>\n
The firm also highlighted management\u2019s increased platform investments, projecting 2025 adjusted EBITDA margin to decline about 175 basis points after expanding 169 basis points in 2024.<\/p>\n
Revenue growth in 2025 is now forecast at 17.4% year-over-year, down from earlier expectations of around 21%, with macro uncertainty and potential regulatory changes limiting visibility for the second half.<\/p>\n
While Wedbush still expects The Trade Desk to benefit from the shift of TV ad budgets to CTV and programmatic, it now anticipates a \u201cslower long-term trajectory\u201d and warns that the company may require increased investment if competitive pressures intensify.<\/p>\n
At around 22 times Wedbush\u2019s revised 2026 adjusted EBITDA estimate, the brokerage said the valuation premium to peers was \u201cunwarranted.\u201d<\/p>\n
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