The Trade Desk (NASDAQ:TTD) shares are down more than 1% in pre-market Tuesday after analysts offered cautious comments on the company’s stock and sector trends.
New Street Research analysts downgraded to Sell amid an increased level of competition for economics with agencies and sell-side platforms (SSPs).
“[We] think questions remain on the outlook for TTD’s identity strategy,” they said in a note.
The analysts expect TTD will post “good” results, although they see “a low likelihood that near-term estimate revisions can support recent multiple expansion, as valuation has gone from ~9x EV/revenue and 25x EV/adjusted EBITDA on 2024 estimates when we launched coverage in January, to ~17x and 45x respectively, today.”
Moreover, Redburn analysts initiated research coverage of TTD stock with a Sell rating and a $34 per share price target.
While the analysts highlight several positives, they also argue that they “do not justify the share price euphoria.”
“We think consensus expectations and market valuations are too high. We worry that evidence of the former will lead to compression in the latter and launch with a Sell rating,” they said in a note.
The analysts' price target implies a downside risk of over 60%.