Trade Desk (TTD) | News Based Sentiment Analysis

• On September 3rd, The Trade Desk reported Q2 2025 revenue of $694.04 million, a 18.7% year-over-year increase, beating estimates. However, the EPS of $0.18 missed consensus estimates of $0.42, triggering a significant stock decline. This earnings miss contributed to a 39% one-day stock crash, the worst in nearly a decade.
• Following the Q2 results on September 3rd and further analysis on September 12th, the company projected at least $717 million in revenue for Q3 2025, representing 14% year-over-year growth, or 18% excluding 2024 political ad spend. This indicates a deceleration in growth compared to the prior year period.
• Investor sentiment took a hit in September, with Morgan Stanley downgrading The Trade Desk from "overweight" to "equal weight" on September 11th, cutting its price target from $80.00 to $50.00 due to concerns over growth durability in CTV advertising. HSBC also downgraded the stock to a "hold" rating.
• Adding to the negative sentiment, Chief Legal Officer Jay R. Grant sold $4.67 million in shares on September 4th, decreasing his ownership by 19.03%, and CEO Jeffrey Green also sold $2.39 million in shares. This insider selling activity raised concerns among investors.
• A significant competitive threat emerged between September 10th and 12th with Netflix partnering with Amazon's DSP, enabling programmatic ad buying across 12 markets starting in Q4 2025. This strengthens "walled gardens" and poses a challenge to The Trade Desk's market share and pricing power in CTV.
• Despite the headwinds, The Trade Desk continues to prioritize growth in Connected TV (CTV), which currently represents the high-40s percentage of its overall business, as highlighted on September 9th-11th. Approximately 75% of client spend now runs through the Kokai platform.
• Institutional investor activity was mixed, with Morgan Stanley increasing its TTD holdings by 129.2% between September 10th and 12th, while JPMorgan Chase & Co decreased its holdings by 43.6%.
• Needham & Company LLC offered a more optimistic outlook on September 8th, reissuing a 'Buy' rating with an $84.00 price target, representing a 61.32% upside.

The Investment Story: September was a challenging month for The Trade Desk, marked by disappointing earnings, downgrades from major firms, insider selling, and increased competition from the Amazon-Netflix partnership. While the company continues to focus on CTV growth, significant headwinds are impacting investor confidence.

What It Means for Investors: The negative developments suggest increased risk for investors, with the stock already down 55% year-to-date as of September 5th. The deceleration in growth, competitive pressures, and insider activity warrant caution, despite the potential of the Kokai platform and CTV expansion.

Looking Ahead: Investors should closely monitor Q3 earnings to assess whether The Trade Desk can deliver on its revenue projections and address concerns about growth. Tracking insider trading patterns and analyst revisions will also be crucial in the coming months.

The Bottom Line: The Trade Desk faces substantial challenges, and the near-term outlook appears uncertain. While long-term potential remains, a cautious approach is warranted, with investors carefully evaluating the company's ability to navigate the evolving competitive landscape and restore investor confidence.