The Trade Desk Stock Dips Despite Earnings Beat, Outlook Seen as 'Slightly Disappointing'

© Reuters. The Trade Desk (TTD) Stock Dips Despite Earnings Beat, Outlook Seen as 'Slightly Disappointing'

Shares of The Trade Desk (NASDAQ:TTD) are down almost 5% in premarket trading Wednesday after the company’s Q2 forecast missed estimates.

TTD reported Q1 adjusted EPS of 21c, beating the consensus estimates of 15c. Revenue came in at $315 million, up 43% YoY and above the analyst expectations of $304.2 million.

For Q2, the company expects adjusted EBITDA of roughly $121 million, short of the expected $127.1 million. Revenue is expected to be about $364 million, missing the estimates of $365.1 million.

“With this innovation focus, along with strong growth across all channels, led by CTV, we are reinforcing our position as the default demand-side platform for the open internet,” the company said in a press release.

Raymond James analyst Andrew Marok reiterated a Market Perform rating as TTD is “fairly valued” at current levels.

“The 2H22 setup is encouraging for the company, with political spend shaping up to be a solid contributor to both top line and EBITDA, though macro worries (which contributed to some weakness in Europe around the start of the Russia/Ukraine conflict) are weighing on the space more broadly. In all, 1Q was a solid if not spectacular quarter,” Marok said in a client note.

KeyBanc analyst Justin Patterson is more positive than Marok on TTD stock after earnings. He sees risk-reward as “more compelling”.

“We see several positive trends playing out: 1) CTV becoming a larger % of the business, with Europe inflecting (>100% y/y growth); 2) OpenPath driving broad publisher and UID2 adoption; and 3) retail media and political remaining 2H catalysts. While bears may be skeptical of 2Q guidance, we believe share gains support 30% y/y growth,” Patterson wrote in a note.

By Senad Karaahmetovic