"Online ad-technology company The Trade Desk (NASDAQ: TTD) used to be a market darling. The company thrived in the coronavirus lockdown era, continued to win in the inflation panic of 2022, and soared in the relative normalcy of 2023 and 2024. The digital advertising market saw several upswings and downturns in this span, but The Trade Desk just kept growing its business."
"At the peak, it traded at lofty valuations such as 134 times free cash flow and 227 times earnings. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. But the market turned against The Trade Desk in a heartbeat. One mildly disappointing revenue report later, the stock dipped 34% in a single week and then kept sliding."
The Trade Desk grew rapidly from 2020 through 2024, benefiting from pandemic-era demand and resilience during inflationary pressures. The stock rose from $27 to $142 and reached very high valuations based on earnings and free cash flow. Recent revenue growth slowed, triggering a sharp market selloff that left the stock about 65% below its peak. Contributing factors include a 2024 political-advertising tailwind that dissipated and major clients cutting ad budgets amid tariff concerns. Management still forecasts nearly 20% revenue growth in 2025 and expects strong free cash flow while executives view volatility as accelerating programmatic-adoption opportunities.
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