Trade Desk, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Matthew Cost from Morgan Stanley downgraded the rating on the stock to a Hold and gave it a $50.00 price target.
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Matthew Cost has given his Hold rating due to a combination of factors impacting Trade Desk’s performance. The company’s core Connected TV (CTV) business is showing signs of slowing growth, which has raised concerns about its ability to maintain its previous momentum. The recent guidance for the third quarter indicated a revenue growth of 14%, which was weaker than expected and has reignited doubts that first appeared with a miss in the fourth quarter of 2024.
Additionally, the growth in video gross billings, including CTV, has decelerated significantly to approximately 11% year-over-year in the second quarter, after experiencing multiple periods of over 30% growth. This slowdown suggests potential challenges in defending its market leadership against competitors like Amazon. These uncertainties, along with tough comparisons moving into 2026 and headwinds in the open web advertising market, have led to a more balanced risk-reward scenario, prompting the Hold rating with a price target of $50.