What happened
Shares of The Trade Desk (TTD +5.53%) fell 10.9% in October 2022, according to data from S&P Global Market Intelligence. The digital ad campaign organizer's investors were spooked by disappointing reports from other companies in the online marketing space. Furthermore, The Trade Desk's analyst day didn't impress anybody.
So what
First, The Trade Desk's annual presentation to financial analysts barely left a ripple on the market. These events are expected to drive investor enthusiasm and leave analysts inspired by the presenting company's latest strategy. Instead, The Trade Desk simply reiterated its existing targets and tactics. The handful of analyst firms that bothered to report on this event held their price targets and ratings steady. Lacking the expected strategy update, The Trade Desk's stock price fell 18% over the next week.
NASDAQ: TTD
Key Data Points
Several titans of the online advertising space reported their results for the third calendar quarter of 2022 in the final week of October. The final straw that broke the space's collective back was when Google parent Alphabet (GOOG +1.10%) (GOOGL +1.31%) posted disappointing ad revenues and weak demand for online marketing assets. Many investors connected the dots between Google's leading ad platform and The Trade Desk's pivotal role in giving advertisers access to Google's marketing tools. As a result, Alphabet's stock fell 11.8% over the next two days, dragging The Trade Desk's shares along for a 7% price drop.
Now what
The advertising market is a tough place to be these days. Economic concerns have forced ad buyers of all sizes and descriptions to tighten their budgets, lowering the total demand for online ad spots. One could argue that this is good news for a company like The Trade Desk, which is in the business of helping other companies squeeze maximum value out of every dollar spent on advertising. However, a weak ad market still doesn't offer much support for growth in related operations such as ad campaign management.
We'll see exactly how The Trade Desk is performing in this challenging market environment later this week. The company is set to publish its third-quarter business update on Thursday morning. For what it's worth, your average analyst expects earnings of roughly $0.22 per share on sales near $386 million, up from $0.18 per share and $301 million in the year-ago period.
