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Why The Trade Desk Stock Fell Wednesday

By Daniel Sparks – Updated Apr 10, 2019 at 12:55PM

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This analyst thinks the stock is fairly valued after its strong run-up recently.

What happened

Shares or programmatic ad-buying platform The Trade Desk (TTD 4.42%) declined sharply on Wednesday, falling as much as 10%. As of 1:30 p.m. EST, the stock was down 9.4%.

The stock's decline comes ahead of the company's earnings release this week but was prompted by a rating change for the stock, from buy to hold, by an analyst at Stifel.

A chalkboard sketch showing a chart of a stock price moving lower

Image source: Getty Images.

So what

Stifel analyst John Egbert lowered his rating (via TheFly) for The Trade Desk stock to hold on Wednesday, noting that consensus expectations for the company seem to be "elevated." Though Egbert believes The Trade Desk's fourth-quarter results will likely come in strong, he believes the stock's sharp year-to-date gain (39% as of market close on Tuesday) has made the shares fairly valued.

Management has contributed to bullish expectations for the company, as CEO Jeff Green said in the company's third-quarter earnings call that he is "more optimistic" about The Trade Desk's "ability to gain market share than we've ever been on our business."

Check out all our earnings call transcripts.

Now what

The Trade Desk will report its fourth-quarter results after market close on Thursday, Feb. 21.

In the company's third-quarter update, management said it expected fourth-quarter revenue of about $147 million, implying 43% year-over-year growth. This translates to revenue of $464 million for the full year.

Daniel Sparks owns shares of The Trade Desk. The Motley Fool owns shares of and recommends The Trade Desk. The Motley Fool has a disclosure policy.

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