Trade Desk Inc (NASDAQ:TTD) faces intensifying competition and "narrative pressure" ahead of its first-quarter (Q1) report on Thursday, May 7, according to Wedbush analyst Alicia Reese.
The impact of these should be "largely offset" by spending tailwinds from the World Cup in summer and higher political spending in the back half of the year, Reese said.
The Trade Desk Analyst
Reese upgraded the rating from Underperform to Neutral, while keeping the price target unchanged at $23.
The company is likely to report revenues of $678 million, representing 10% growth and almost in line with the consensus of $679 million, Reese said in the note.
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She also expects Trade Desk to post adjusted EBITDA of $197 million and earnings of 33 cents per share, versus consensus estimates of $198 million and 32 cents per share.
The company's gross margin is likely to have contracted by 100 basis points (bps) to 76% in the first quarter, after having contracted through 2025, "as the company invests in infrastructure to support rising media impressions and new tech, aiming to sustain its position as a programmatic leader in CTV and digital formats," the analysts wrote.
Trade Desk could provide its second-quarter guidance in-line with consensus estimates of $773 million in revenue and $294 of million in EBITDA, she further stated.
While expressing concern around Trade Desk's competitive positioning, Reese said that ongoing audits could limit the company's longer-term growth. The analyst noted, however, that there is potential upside to Trade Desk's performance from:
- The World Cup in the second and third quarters
- Political spending in the second half of 2026
CTV's growing share of political advertising is likely to drive at least 400 bps of revenue growth in the back half of the year, she further said.
TTD Price Action: Shares of Trade Desk had risen by 1.40% to $24.58 at the time of publication on Monday.
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