Today’s Change
Current Price
Trade Desk (TTD -6.80%), a cloud-based programmatic advertising platform for data-driven digital ad buyers, closed at $17.67, down 6.80%. Investors sold shares throughout the day ahead of Q2 results, and things got worse after hours as the company reported dismal results. As of 5 p.m. ET, TTD stock is down 22%. Trading volume reached 49.5M shares, coming in about 152% above its three-month average of 19.7M shares. Trade Desk IPO’d in 2016 and has grown 487% since going public.
How the markets moved today
The S&P 500 (^GSPC -0.18%) closed at 7,711, down 0.16%, while the Nasdaq Composite (^IXIC -0.06%) finished at 26,348, down 0.06%. Among advertising technology rivals, Magnite (MGNI +17.66%) closed at $24.32, up 17.66%, and PubMatic (PUBM -0.22%) closed at $13.48, down 0.22%, highlighting a split in the peer group.
What this means for investors
The market was already pessimistic about The Trade Desk’s Q2 earnings call after close today, as the stock slid 7% during market hours — and the company’s actual results did nothing to dissuade this negative outlook once they hit the press, as the stock declined another 22% after close. Not only did the company’s Q2 earnings fall well short of analyst consensus, but Trade Desk guided for sales of “at least” $650 million — far shy of Wall Street’s expectations for $805 million. If this revenue guidance is correct, it would represent a 12% year-over-year decline in sales.
While The Trade Desk was once a core holding for me — I still hold all my original shares — I can’t imagine adding to the position anytime soon. Rather, I’m content to see what new management can bring to the table and see what niche the company can carve out for itself in a rapidly evolving advertising landscape. That said, today’s results show that the company has seemingly lost its grip as the leader in its “open internet” slice of the advertising market, and I would need to see a 180 in results over the next few quarters to really get excited about the stock again.
Josh Kohn-Lindquist has positions in The Trade Desk. The Motley Fool has positions in and recommends PubMatic and The Trade Desk. The Motley Fool recommends Magnite. The Motley Fool has a disclosure policy.
