With the major indices continuing to set fresh records, it can be tough for investors to feel comfortable buying into names already trading at highs. However, at the other end of the spectrum, it can be just as tough to buy into a stock that has been sinking like a stone—or, as Wall Street likes to say, to catch a falling knife. Currently, two stocks firmly in that camp are The Trade Desk Inc. NASDAQ: TTD and Duolingo Inc. NASDAQ: DUOL, which have shed close to half their value this summer. Both have been i ...

Core Viewpoint - The Trade Desk is experiencing significant challenges in 2025, with a 55% drop in stock value year-to-date due to competitive pressures and execution issues [3][5][14] Company Performance - The Trade Desk's Q1 revenue increased by 25% year-over-year, but Q2 revenue growth slowed to 19%, with earnings per share rising only slightly to $0.39 [5][6] - The company's guidance for the current quarter indicates a further deceleration in revenue growth to 14%, with expected revenue of $717 million and adjusted EBITDA forecasted at $277 million, an 8% year-over-year improvement [7][12] Competitive Landscape - Competitors like Amazon and Meta Platforms are reporting strong growth, with Amazon's advertising business growing 23% year-over-year to $15.7 billion, and Meta's revenue increasing by 22% [8][11] - Amazon's recent deal with Roku to expand in the connected TV advertising space poses a direct threat to The Trade Desk, which relies on this market for growth [9] Valuation Concerns - The Trade Desk is trading at 66 times trailing earnings, which is double the average price-to-earnings ratio of the Nasdaq-100 index, raising concerns about the stock's valuation amidst slowing revenue growth [14] - Analysts predict only an 8% improvement in earnings to $1.79 per share this year, with a return to double-digit growth expected in 2026 [12]

Core Viewpoint - The article discusses the potential of growth stocks that have recently experienced significant declines in value, presenting them as attractive investment opportunities for long-term portfolios [1][3]. Group 1: Market Overview - Growth stocks are appealing for investors aiming to achieve financial goals quickly, although some may prefer dividend-paying stocks [1]. - Recent market downturns have led to attractive valuations for certain growth stocks, with some companies experiencing share price drops of at least 20% over the past month [3]. Group 2: Company Analysis - **Block (formerly Square)**: - The stock has fallen significantly, nearing its 2018 price, with a recent revenue growth of only 4.5% year over year, but earnings per share (EPS) increased by 51% [5][4]. - **The Trade Desk**: - Despite a 41% drop in stock price following a disappointing earnings report, the company reported a 22% year-over-year revenue increase and a 44% rise in non-GAAP income [6][7]. - The CEO acknowledged execution missteps but expressed optimism due to increasing ad placements in streaming services [8]. - **Accenture**: - This professional services giant has seen its stock decline nearly 20% over the past year, but it has a strong historical performance with annual gains of 16.5% over the past five years [10]. - Recent earnings showed a drop in new bookings growth, but the company is investing in new technology and has a growing dividend yield of 1.8% [11]. - **MongoDB**: - The company reported a 20% year-over-year revenue increase, with its cloud platform, Atlas, contributing 71% of the revenue [12]. - Concerns exist regarding customer spending in the current economic climate, but the company is investing in artificial intelligence [12][13]. Group 3: Investment Considerations - Each of the discussed companies presents potential for above-average gains in the long term, despite current market challenges [13]. - For investors uncertain about selecting individual stocks, exchange-traded funds (ETFs) focused on growth may be a viable alternative [13].

Core Viewpoint - The recent market sell-off has created attractive buying opportunities for long-term investors, particularly in growth stocks like The Trade Desk, which has seen significant price declines despite its long-term potential [1][2]. Company Overview - The Trade Desk operates in the programmatic advertising platform sector, assisting ad buyers in placing ads effectively across various media, including podcasts, videos, and connected TV [3][4]. Recent Performance - The Trade Desk experienced a significant decline in stock price, approximately 60% down from its all-time high, following a disappointing Q4 earnings report where revenue fell short of projections [5][8]. - In Q4, The Trade Desk reported revenue of $741 million, missing the guidance of $756 million, and projected a revenue of $575 million for Q1, indicating a 17% growth slowdown [5][6]. Management Insights - Management acknowledged execution mistakes during Q4, attributing some challenges to a platform transition from Solimar to Kokai, expected to complete by 2025 [6]. - CEO Jeff Green expressed confidence in the long-term market potential despite short-term execution issues, likening the situation to a championship team facing challenges in a specific game [6][7]. Market Opportunity - The shift towards streaming services presents a substantial opportunity for programmatic advertising, allowing targeted ads to replace traditional broad-reaching advertisements [4]. - The Trade Desk's long-term growth potential remains strong, with expectations to capture a significant market share despite current valuation concerns [9][10]. Investment Perspective - The current stock price presents a rare buying opportunity, as The Trade Desk has lost its premium valuation, making it more attractive for long-term investors [8][10]. - A forward earnings valuation of 30 times is considered a better price compared to previous months, suggesting potential for growth into this valuation [9].