Last year wasn’t an easy one for The Trade Desk Inc. (TTD). But with the shares recently below $40, the risk/reward looks far different than when the stock traded above $140, suggests Bret Kenwell, US investment analyst at eToro.
After a strong election year fueled TTD’s growth, bulls entered 2025 with confidence as shares finished 2024 higher by more than 60%. A year later, the script had flipped, with TTD shedding roughly two-thirds of its value and even taking out its 2022 bear-market lows.
The Trade Desk operates as a buy-side advertising technology platform enabling marketers to plan, execute, and optimize programmatic campaigns across display, video, CTV, audio, and mobile. A tough year of comps in 2025, paired with hiccups in its main platform update, weighed on results — a spinout it couldn’t correct as year-end approached.
Still, there were notable positives. Management emphasized that the platform delays were non-negotiable, as they prioritized product quality over short-term optics. As co-founder and CEO Jeff Green noted, “In Q4 [2024] there were a series of decisions we could have made to enhance the short-term performance…We consistently choose to focus on the long term opportunity.”
The C-suite also expanded, adding a much-needed COO with Vivek Kundra, CRO Anders Mortensen (from Alphabet), and CFO Alex Kayyal (from Salesforce), positioning the team to streamline operations and better execute long-term goals.
Financial performance improved as well. While February’s Q4 report delivered a slight revenue miss and slightly below-consensus guidance, subsequent quarters saw revenue and guidance exceed expectations.
Consensus expectations call for GAAP earnings growth of about 29% in 2026 and 26% in 2027 (with adjusted earnings growth of 16.5% and 13.3%). Analysts expect revenue growth of about 16% in both years, and free cash flow growth of 15.5% in 2026 and 20% in 2027.
Forward P/E (white) and forward P/FCF (blue).
Source: Bloomberg, 12/12/2025
If TTD meets these metrics, the stock appears compelling at less than 18 times 2026 earnings estimates, not to mention forward earnings and FCF multiples near trough levels (shown in chart). Bulls should feel further reassurance as the company operates with a pristine balance sheet.
Recommended Action: Buy TTD.
