Down 63%, Should You Buy the Dip on The Trade Desk Stock?

Core Viewpoint - The Trade Desk's stock has significantly declined by 63% in 2025 due to a slowdown in growth, increased competition, and high valuation concerns [1][2] Company Performance - The Trade Desk reported Q3 revenue of $739 million, reflecting an 18% year-over-year increase, while non-GAAP earnings rose by 10% to $0.45 per share [3] - The company's adjusted earnings increased by only 10% in the first nine months of 2025, indicating a premium valuation that may not be justified [4] - Revenue guidance for the current quarter is set at $840 million, surpassing the consensus estimate of $830 million, but represents only a 13% increase from the previous year [5] Competitive Landscape - The Trade Desk is facing challenges in the programmatic advertising market, particularly from competitors like Amazon, which is expanding its presence in connected TV advertising [6][9] - Amazon's recent partnerships with Disney and Netflix for programmatic ad inventory may be impacting The Trade Desk's growth [9] - The Trade Desk's management noted that supply is significantly outstripping demand, making it difficult to attract advertisers to its platform [10] Market Position - The Trade Desk's growth rate is now slower than the overall programmatic advertising market, which is projected to grow at an annual rate of 23% through 2030 [6][7] - The current market cap of The Trade Desk is $20 billion, with a price-to-earnings ratio of 61, significantly higher than the Nasdaq-100 index's P/E of 34 [8]