The Trade Desk  (TTD)  $43.50, more than a GARP.

Industry/Sector/Type -  - - Ad Tech/Secular growth, facing a slowdown…GARP

Biggest catalyst for the stock - Growing TAM in connected TV, addressing growth problems

The Trade Desk stumble:

The company was riding a huge wave of ad-tech innovation, growing revenue and earnings 38 and 31%, respectively in the past decade, but slowed down in the first half of 2025; growth petered from 23% in the past three years to 16%, which caught the markets by surprise.

We have seen this story before, I saw it up close in Duolingo and Bumble to name two. A classic case of tech super growth for coming down to still secular growth but losing that shine of high valuations, an inflection point which catches most analysts napping. 

[caption id="attachment_6208" align="alignnone" width="800"] CTV_market_programmatic Source:emarketer[/caption]

Positives

1. The programmatic advertising market's demand side platform segment is dominated by 3 heavyweights, Google, Amazon and The Trade Desk. As an independent DSP (Demand Side Platform), The Trade Desk is  good for advertisers who don’t want to be locked into Amazon’s and Google’s walled gardens.
2. The TAM for programatic advertising and CTV - Connected TV (Netflix, Amazon Prime, YouTube, etc) is supposed to be over $100Bn and CTV is growing the fastest. By 2028 it will overtake broadcast or traditional TV. You can see the rampant growth over broadcast TV above.
3. Its operating and cash flow margins are still largely intact at over 18% and 30%, have not retreated from the prior years.
4. Data driven marketing and advertising markets are growing faster especially in verticals like Finance and healthcare, which offer good target markets not bound by exclusivity.
5. Significant personnel changes to address slowing growth, product improvements with 85% adoption from clients to the newer AI platform.
6. A decent bargain price of just 20x earnings and 6x sales translating to a PEG of 1.2, and Sale/Growth ratio of 0.37 suggest good margin of safety and limited downside for the stock price.
7. TTD's largest customer vertical was retail, about 9% in 2025, and TTD believed that it would lose growth because of tariffs. Should the supreme court reverse tariffs this could be a headwind in 2026.

Negatives

1. The intense competition between Amazon's and Google's DSPs have created a price war which hurts the industry and The Trade Desk.  Amazon in its bid to catch up with Google in advertising cut inventory prices and fees, gaining market share at the expense of rivals like The Trade Desk. 
2. Revenue growth slowed from 23% in the last 3 years to 16% - as we’ve seen with several other tech companies, markets tend to disproportionately hurt slowing growth, once that growth shine pales, stocks tend to stay low and range bound till a newer group in investors buy them as GARPS (Growth At a Reasonable Price) , the secular growth cohorts discard the mid teen or high teen growers, essentially stripping them of valuation premiums.
3. TTD’s market has also shrunk because of Google and Amazon cornering contracts from big advertisers such as YouTube, which uses Google and Prime which naturally favors Amazon, and similarly Hulu and Disney favor Disney’s Ad manager. 

The stock is a cautious buy:

TTD is down 66% in the past year, and has a limited downside. With 18% earnings growth and mid teens revenue growth the company is very reasonable as a cautious buy without too much upside. I think a 14-15% return from this level per year for the next 3-5 years is on the cards.