Citi downgrades The Trade Desk to Sell as ad-tech earnings disappoint
Shares have fallen nearly 65% year-to-date, with the bank setting an $11 price target following a significant miss on adjusted EBITDA expectations.
Citi analysts, led by Ygal Arounian, have downgraded The Trade Desk (TTD) to a "Sell" rating, assigning a price target of $11. The decision follows a weak second-quarter earnings release and disappointing forward guidance from the advertising technology firm. The downgrade comes as TTD shares have already declined nearly 65% year-to-date, with the stock tanking further on Friday following the earnings report.
In a research note, Arounian indicated that the stock could tumble further through the remainder of 2026, citing a potential for another 27% downside from current levels. The analyst highlighted internal execution concerns and a structural shift in the advertising industry as key bearish factors. Management now expects adjusted EBITDA of $160 million for the current fiscal quarter, a figure that significantly trails the analyst consensus of $339.6 million.
The Trade Desk’s demand-side platform, which primarily facilitates programmatic ad buying, is facing headwinds as corporate marketing budgets tighten. CEO Jeff Green attributed the underperformance to macroeconomic pressures and cautious spending by major brands. As a result, advertisers are reportedly moving away from open-web programmatic auctions toward cheaper, fixed-price programmatic guaranteed deals, a shift that directly undercuts the company’s core revenue engine.
Citi warned that TTD faces prolonged operational friction and an elevated risk of market share loss to rival platforms over the next 12 months. Arounian noted that given the challenging backdrop and lackluster forward guidance, it is increasingly difficult to recommend owning TTD shares for the back half of 2026.
Prior to the earnings release, Wall Street held a consensus "Moderate Buy" rating on the stock with a mean price target of just under $26. The sentiment has since hardened, with Barchart also holding a "100% SELL" opinion on TTD, indicating that technical momentum favours continued downside. Investors are advised to exercise caution, as further downward revisions may follow in the coming days.
