The Trade Desk’s 0.76% Drop and 271st Market Activity Rank Signal Struggles as Growth Slows and Valuation Concerns Persist

On September 3, 2025, The Trade Desk (TTD) closed with a 0.76% decline, trading at a volume of $380 million, ranking 271st in market activity for the day. The stock has fallen 55% year-to-date, marking its most significant drawdown in history.

Investor sentiment has soured following the company’s second-quarter earnings report on August 7. Revenue rose 19% year-over-year to $694 million, but this marked a deceleration from 26% growth in the prior-year period. Guidance for Q3 indicated a further slowdown to 14% year-over-year growth, with revenue projected at $717 million. The report highlighted a 13% net income margin, undershining expectations for a larger profit expansion despite the company’s scale.

Comparisons to industry peers have exacerbated concerns. Meta Platforms, for instance, reported a 21% year-over-year increase in ad revenue during the same quarter, outpacing The Trade Desk’s growth at a much larger scale. This has raised questions about The Trade Desk’s ability to maintain its competitive edge in digital advertising, particularly as its high gross margin (80% over the past 12 months) has not translated into stronger net profitability.

Valuation remains a contentious issue. Despite an 89% drop in its price-to-sales (P/S) ratio from 20 to 10 since the August slump, the stock still trades at nearly three times the S&P 500’s average P/S of 3.2. Analysts argue that the valuation remains elevated unless the company demonstrates rapid growth or significantly improves its net margin, both of which have yet to materialize.

Backtesting data from The Motley Fool’s Stock Advisor service shows that $1,000 invested in recommended stocks since 2004 would have returned 1,042%, far outperforming the S&P 500’s 183%. The Trade Desk, however, was excluded from the latest list of top 10 stocks, signaling lingering skepticism about its investment potential amid current market conditions.