Has The Trade Desk Stock Found a Floor?

The Trade Desk US88339J1051

The advertising technology firm The Trade Desk has endured a punishing period, with its shares losing approximately 70% of their value in 2025 and ranking among the worst performers in the S&P 500. In a bid to stem the decline, management has authorized a new $500 million share repurchase program. The critical question for investors is whether this move can restore confidence.

The stock's dramatic descent is stark. From a 52-week high of $127.59, shares have collapsed to a current level around $38. This sell-off has erased billions in market value, leaving the company with a capitalization of roughly $18.4 billion. The technical picture remains weak, with the price trading well below its key moving averages of $41.64 (50-day) and $55.02 (200-day). A correction of nearly 70% is severe, even by the standards of volatile technology equities.

Analysts point to a confluence of pressures behind the decline. A broader valuation reassessment in a higher interest rate environment has been compounded by market uncertainty regarding the potential disruptive impact of artificial intelligence on the company's core programmatic advertising business model.

A $500 Million Vote of Confidence

The newly approved buyback initiative, representing about 2.1% of outstanding shares at the current price, is a clear signal from the board. The underlying message is that management views the stock as significantly undervalued. While repurchases mechanically reduce share count and can boost earnings per share, the primary intent here appears psychological—an attempt to demonstrate conviction to the market.

Notably, some institutional investors have been building positions aggressively during the downturn, suggesting they see a contrarian opportunity. Sound Income Strategies LLC increased its stake by over 317%, while West Oak Capital LLC boosted its holding by a substantial 466%.

Divergent Views from Market Experts

Despite the catastrophic price action, analyst sentiment has not turned uniformly negative. Of the 36 firms covering the stock, 21 maintain a "Buy" or equivalent rating, 12 advise "Hold," and only 3 recommend "Sell." However, price targets have been slashed across the board. Morgan Stanley, for instance, cut its target from $80 to $50 and downgraded the stock to "Equal Weight." In contrast, UBS has held firm with an $82 price objective.

The average 12-month price target stands at approximately $76.56, implying a potential doubling from current levels. It is important to note that this average may be skewed by older, more optimistic forecasts that have not yet been updated.

From a fundamental perspective, the company's latest earnings report slightly exceeded expectations. It posted earnings per share of $0.45 against a consensus estimate of $0.44, with revenue reaching $739.4 million—a year-over-year increase of 17.7%. The stock now trades at a P/E ratio of 43.6, a level that, while markedly lower than historical multiples, still prices in significant growth expectations.

The Path to Recovery

The Trade Desk is navigating a pivotal moment. The buyback program and selective institutional accumulation may help establish a base for the share price. Nevertheless, the technical outlook will stay challenged as long as the stock remains below its key moving averages. The enormous gap between the average analyst target and the current market price underscores the profound uncertainty in valuing the company within a difficult macroeconomic and sector-specific backdrop.