After an 83% Plunge, Is The Trade Desk Dead Money?

Core Viewpoint - The Trade Desk has experienced a significant decline in stock value and revenue growth, attributed primarily to increased competition, particularly from Amazon [1][5][10] Company Performance - The Trade Desk's stock has fallen 83% from its peak in late 2024, marking its weakest growth rate ever, except for a brief dip during the pandemic [2] - Revenue growth has consistently slowed over the past year, with Q4 2024 at 22%, Q1 2025 at 25%, Q2 2025 at 19%, Q3 2025 at 18%, and Q4 2025 at 14% [3] - Management anticipates revenue growth to slow further, projecting at least $678 million in revenue for the first quarter, equating to just 10% growth [3] Competitive Landscape - The Trade Desk's challenges are largely attributed to competition, particularly from Amazon's new demand-side platform (DSP), which enhances usability and reduces campaign setup time by 75% [5][6] - Amazon has gained market share in retail media and Connected TV, leveraging its extensive customer data and streaming platform to attract advertisers [6] Market Context - The Trade Desk's management has identified weaknesses among consumer packaged goods (CPG) and auto advertisers, which constitute 25% of its business, as contributing factors to its revenue challenges [8] - In contrast, leading digital advertising platforms like Google, Meta, and Amazon reported robust growth in the fourth quarter, with Google at 13.6%, Meta at 24.3%, and Amazon at 23% [9] Investment Outlook - The current price-to-earnings ratio for The Trade Desk stands at 27, suggesting a reasonable valuation, but a turnaround in performance is not guaranteed [9][10] - Investors are advised to wait for revenue growth to stabilize before considering investment in The Trade Desk, as the stock may still decline further [10]