Shares of The Trade Desk (TTD) have collapsed and are down 26% after the digital content and online advertising company reported mixed financial results.
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The California-based company announced fourth-quarter 2024 earnings per share (EPS) of $0.59, which was ahead of the $0.57 forecast on Wall Street. However, revenue in the quarter came in at $741 million, which missed the consensus estimate that called for $759.05 million. Sales were up 22.3% from a year earlier.
The Trade Desk, which specializes in software for online advertising, also reported an operating margin of 26.4%, up from 23.8% in the same quarter of 2023. However, its free cash flow margin of 23.9% was down significantly from 35.4% in the previous quarter of 2024.
Forward Guidance
Looking ahead, The Trade Desk forecast revenue of $575 million for the current first quarter of 2025. That was below the $581.50 million that analysts had penciled in for the company. Q1 earnings are expected to be $145 million, which is also below analyst estimates of $192.7 million.
While the financial results and guidance sent TTD stock sharply lower in after hours trading, the company did announce a significant expansion of its stock buyback program, lifting its total authorization to $1 billion. In Q4 2024, the company bought back $57 million of its own stock.
Before this latest plunge, TTD stock had risen 68% over the past 12 months.
Is TTD Stock a Buy?
The Trade Desk’s stock has a consensus Strong Buy rating among 22 Wall Street analysts. That rating is based on 19 Buy and three Hold recommendations issued in the last three months. The average TTD price target of $142.05 implies 16.22% upside from current levels. These ratings are likely to change after the latest financial results and guidance.
