The Trade Desk (TTD.US) was downgraded by Susquehanna and the target price was cut by nearly 60%, and the stock price once fell by about 26%

The Zhitong Finance App learned that the stock price of digital advertising technology company The Trade Desk (TTD.US) fell sharply on Friday, and the decline widened to about 26% after opening. Previously, investment bank Susquehanna downgraded the company's rating from “positive” to “neutral” and drastically lowered the target price from $34 to $14, citing challenges in the company's short-term execution, weak demand from advertisers, and pressure on growth prospects.

The day before, The Trade Desk announced second-quarter results that fell short of market expectations. The company's stock price plummeted 23% during the intraday period and eventually closed down 6.8%.

Susquehanna pointed out that the company's short-term business environment is still full of challenges, and macroeconomic pressure, advertising pricing pressure, and execution-level issues will continue to affect future performance.

According to financial reports, The Trade Desk's second-quarter revenue increased by only 3% year-on-year, below market expectations; adjusted EBITDA and earnings per share also fell short of analysts' forecasts.

The agency said that against the backdrop of geopolitical uncertainty, weak consumer demand, and continued inflationary pressure, advertising demand from consumer goods and automobile industry advertisers has clearly weakened, which is an important reason why the company's performance is under pressure.

Susquehanna stated in the report: “The second-quarter results fell short of expectations, and the company is still facing ongoing challenges.” Furthermore, the agency pointed out that some advertisers are switching to lower cost advertising methods, which is further suppressing the company's growth performance.

Despite the downgrade, Susquehanna did not deny The Trade Desk's long-term development prospects. The agency believes that connected TV will continue to be the company's most important growth engine in the future, while business directions such as retail media, international market expansion, artificial intelligence applications, and supply path optimization still have great potential for growth.

However, considering the current downward shift in the valuation center and short-term fundamental pressure, Susquehanna lowered the company's valuation assumptions and believes that in the short term, stock prices will still be suppressed by slowing growth and execution risks.