The Trade Desk saw its stock rating cut by multiple Wall Street analysts after the digital advertising platform provided second-quarter revenue guidance that fell short of consensus, raising alarms about a possible sustained slowdown in growth.
Investors were presented with mixed signals. First-quarter revenue of $689 million represented 12% year-on-year growth and exceeded the consensus estimate of roughly $679 million. Adjusted EBITDA for the quarter was $206 million, which also topped expectations.
Despite the beat in the first quarter, the companys guidance for the second quarter disappointed. The Trade Desk said it expects second-quarter revenue of at least $750 million, below the Streets approximate forecast of $771 million. That guidance implies year-on-year revenue growth of about 8%, a deceleration from recent pace that triggered multiple analyst downgrades.
Oppenheimers Jason Helfstein moved his rating on the stock to Perform from Outperform and removed his $35 price target, saying he sees "no catalyst until revenue accelerates."
William Blairs Ralph Schackart lowered his rating to Market Perform, pointing to competitive share losses and what he described as a "sustained lower growth profile." Schackart also cited friction surrounding pricing for the company's Kokai AI platform upgrade, saying the pricing is "higher than expected, leading to more difficult pricing discussions with customers."
KeyBancs Justin Patterson cut the stock to Sector Weight, contending that "the combination of Middle East turmoil, ad agency tensions, and changes to industry structure are pressuring growth." Patterson added that while geopolitical and agency issues could eventually ease, "we do not see the competitive factor changing any time soon."
KeyBanc now models 9% revenue growth in both 2026 and 2027, a step-down from 19% growth in 2025 and 26% in 2024.
Market reaction reflected investor concern about the slower outlook and the cited operational headwinds. The combination of tougher pricing conversations, competitive dynamics, and external demand pressure from geopolitical developments around the Middle East were central to analysts calls to trim ratings.
Context for readers
The companys recent reporting shows it can beat near-term expectations, as evidenced by first-quarter revenue and adjusted EBITDA results. However, guidance that points to a marked slowdown in growth has led at least three firms to lower their assessments of the stock until they see clearer evidence of accelerating revenue.