On Tuesday, The Trade Desk Inc (NASDAQ:TTD) experienced a marked downturn in its stock price following a pronounced revision in its target price by KeyBanc’s analyst Justin Patterson. While the analyst retained an Overweight rating on the shares, he significantly lowered the price target from $88 to $40, amounting to an approximate 55% cut. This update aligns with a pattern over the previous week, where several analysts have adjusted their price targets downward, pointing to an increasingly cautious stance toward the company’s future prospects.
Justin Patterson cited a moderation in growth expectations as the primary rationale for this adjustment. Specifically, he reduced his revenue forecasts for The Trade Desk for the years 2026 and 2027 by 1% and 5%, respectively, attributing these changes to softer anticipated spending in the open-internet advertising sector. Corresponding downward revisions were also applied to the company’s projected EBITDA, with a 1% decrease for 2026 and a more pronounced 6% cut for 2027.
KeyBanc’s recalibrated valuation now utilizes an 11.5x multiple of The Trade Desk’s projected 2027 enterprise value to EBITDA (EV/EBITDA), reflecting both the updated financial outlook and a reduced valuation benchmark relative to prior assumptions.
Despite these downward adjustments, The Trade Desk reaffirmed its guidance for the fourth quarter of 2025, anticipating at least $840 million in revenue and approximately $375 million in adjusted EBITDA. This suggests that, while growth assumptions are tempered, the company maintains confidence in its near-term operational performance.
Technical Indicators Reflect Stock Vulnerability
Examining the technical condition of TTD reveals a significant bearish trend. The share price is currently trading 24.4% below its 20-day simple moving average (SMA) and is 37.4% lower than its 100-day SMA, both benchmarks indicative of sustained downward momentum. Over the course of the last twelve months, TTD’s shares have declined substantially by 77.28%, bringing the stock close to its 52-week lows and further signaling long-term pressure.
The Relative Strength Index (RSI), a momentum indicator, stands at 24.01, placing the stock in oversold territory. This condition generally suggests that the stock may be undervalued in the short term and could potentially see a recovery should buying interest increase. Conversely, the Moving Average Convergence Divergence (MACD) indicator is positioned below its signal line, confirming that bearish momentum remains dominant.
The coexistence of an oversold RSI and a bearish MACD indicates mixed signals in terms of momentum, underscoring the challenges facing the stock in the current market environment.
Support and Resistance Levels
Technical analysis further identifies key price levels that could influence future trading dynamics for The Trade Desk. Resistance is pegged at $29.50, a price point where upward momentum could face selling pressure. On the downside, a support level is identified at $25.00, below which further declines might accelerate if broken.
Current Market Performance
At the time of publication, Trade Desk shares were trading down 9.58%, priced at $26.90. This level marks a new 52-week low for the company, highlighting the significant challenges in maintaining investor confidence amid revised growth expectations and pervasive bearish sentiment.
Summary of Financial and Technical Outlook
- KeyBanc analyst Justin Patterson maintained an Overweight rating but lowered the price target by approximately 55%, from $88 to $40.
- Revenue and EBITDA forecasts for 2026 and 2027 were revised downward, reflecting softening outlooks for open-internet advertising spending.
- The Trade Desk confirmed its Q4 2025 guidance, signaling sustained operational targets with revenue and adjusted EBITDA forecasts.
- Technical indicators point to a strong bearish trend, with the stock significantly below key moving averages and approaching 52-week lows.
Key Risks and Uncertainties
- A decline in open-internet advertising spend could continue to pressure revenue growth expectations and company valuation.
- Negative momentum indicated by technical analysis may persist, risking further declines or increased volatility.
- The substantial cut in price targets suggests market sentiment may remain cautious, affecting liquidity and investor interest.
- Potential breach of support levels could accelerate downward price movements, increasing downside risk for shareholders.