The Trade Desk slumps as Benchmark downgrades, citing several factors
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The Trade Desk (NASDAQ:TTD) shares fell more than 3% in premarket trading on Thursday as investment firm Benchmark downgraded the advertising technology firm, citing several reasons, including "untenable" expectations from the buyside for 2023.
"Post CEO Jeff Greenâs bullish 1Q and broadly 2023 outlook on the 4Q call, we believe buy-side expectations have rerated to untenable levels, while eclipsing overly optimistic consensus expectations," analyst Mark Zgutowicz wrote in an investor note.
He sees buyside expectations as showing revenue growth in 2023 of 20% or more, compared to his expectations of 15% year-over-year growth.
In addition to the expectations from the buyside, Zgutowicz listed "unhealthy" non-connected TV growth as recent checks have shown digital ad spending is flat to down 5% for 2023. Zgutowicz also listed concerns over data signal losses coming from Apple (AAPL) and Google (GOOG) (GOOGL) and getting no reprieve from the company's Unified ID Solution 2.0, as well as a decline in investor appetite for high multiple stocks.
Last week, research firm BTIG started coverage on The Trade Desk (TTD) with a neutral rating, noting the company should see client growth and budget gains, but worries over "slightly aggressive" consensus expectations exist.