Please ensure Javascript is enabled for purposes of website accessibility

Why The Trade Desk Stock Was Slammed Thursday

By Daniel Sparks - Updated May 9, 2019 at 11:55AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Better-than-expected top- and bottom-line first-quarter results weren't enough to impress Wall Street.

What happened

Shares of programmatic ad platform The Trade Desk (TTD 7.06%) took a hit on Thursday. As of 11:30 a.m. EDT, the stock was down more than 18%.

The stock's decline follows The Trade Desk's first-quarter results. Though the quarter's top- and bottom-line results crushed estimates, high expectations meant in-line second-quarter revenue guidance spooked some investors.

A pair of hands typing on a laptop with the screen showing charts.

Image source: Getty Images.

So what

The Trade Desk's first-quarter revenue increased 41% year over year to $121 million. Analysts, on average, were expecting revenue of $117 million. Non-GAAP earnings per share increased from $0.34 in the first quarter of 2018 to $0.49, also easily beating a consensus analyst forecast for $0.25.

"In Q1, we continued to develop closer relationships with the biggest brands in the world," said The Trade Desk CEO Jeff Green in the company's first-quarter earnings release. "Over half of the companies in the S&P 500 have run campaigns on our platform. We are executing well."

The company's guidance for second-quarter revenue of $154 million, however, was in line with what analysts were looking for.

The Trade Desk stock has been surging this year, putting immense pressure on Thursday's earnings report. Even after today's sell-off, shares are up 55% year to date and more than 250% over the past year.

Now what

With a strong first quarter behind it, The Trade Desk lifted its outlook for the full year. Management said it expects full-year revenue of at least $645 million, up from previous guidance for revenue of $637 million or greater. In addition, The Trade Desk guided for adjusted EBITDA for 2019 of $188.5 million, up from guidance for $182 million.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Trade Desk Stock Quote
The Trade Desk
$52.49 (7.06%) $3.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.