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One of the biggest stories of last week was how The Trade Desk, Inc. ( NASDAQ:TTD ) shares plunged 37% in the week since its latest second-quarter results, closing yesterday at US$54.23. Results were roughly in line with estimates, with revenues of US$694m and statutory earnings per share of US$0.18. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Trade Desk’s 37 analysts are now forecasting revenues of US$2.86b in 2025. This would be a modest 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 5.9% to US$0.80 in the same period. Yet prior to the latest earnings, the analysts had anticipated revenues of US$2.86b and earnings per share (EPS) of US$0.84 in 2025. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for Trade Desk
It might be a surprise to learn that the consensus price target fell 5.7% to US$84.88, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Trade Desk at US$135 per share, while the most bearish prices it at US$47.00. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trade Desk’s past performance and to peers in the same industry . We would highlight that Trade Desk’s revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 25% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.7% per year. So it’s pretty clear that, while Trade Desk’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
