The Trade Desk’s stock plummeted 32% on Friday after a major analyst downgrade, slashing its price target from $75 to $45. The downgrade cited a "permanently damaged valuation halo" due to emerging threats and slowing growth, marking a stark shift from its former status as a market darling. Recent quarterly results, while beating Wall Street estimates, fell short of higher buy-side expectations, prompting multiple analysts to lower their targets. Concerns over stagnating revenue growth below 20% and lackluster GAAP earnings have fueled skepticism about the advertising tech firm’s future trajectory.
Flash Crash or Fundamental Shift?
The stock’s unprecedented drop, trading as low as $61.10, isolated The Trade Desk among tech peers amid pre-market volatility. Analysts now urge valuation based on conventional metrics like free cash flow, comparing its prospects to Netflix’s recalibration phase. With bearish sentiment dominating, investors question whether the company can reclaim its growth narrative or face prolonged reevaluation.
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