Why The Trade Desk Stock Dropped Today

**The Trade Desk **(TTD 5.68%) stock tumbled 6.2% through 9:50 a.m. ET Thursday, despite beating analyst targets for both sales and earnings last night.

Analysts forecast The Trade Desk to earn $0.34 per share on sales of $841.2 million in Q4. TTD actually earned $0.59 per share on sales of $847 million.

Image source: Getty Images.

The Trade Desk Q4 earnings

Unfortunately, this good news wasn’t quite as good as it looks at first glance. “$0.59,” you see, was a non-GAAP number; when calculated under generally accepted accounting principles (GAAP), The Trade Desk actually earned closer to $0._39 _per share – just 8% more than last year.

Viewed in the context of 14% year-over-year sales growth, this implies weakening profit margins for the advertising seller and advertising effectiveness measurer, and indeed, TTD’s net profit margin contracted by three full percentage points to 22%.

For the full year fiscal 2025, TTD grew sales 18% to $2.9 billion (so sales growth also slowed in Q4). On the plus side, full-year net profit margin was only 15%, so Q4 represented an improvement in that regard. Profits for the year were $0.90 per share – up 15%.

Expand

NASDAQ: TTD

The Trade Desk

Today’s Change

(-5.68%) $-1.43

Current Price

$23.73

Key Data Points

Market Cap

$12B

Day’s Range

$21.09 - $23.91

52wk Range

$21.09 - $91.45

Volume

810K

Avg Vol

14M

Gross Margin

78.81%

Is The Trade Desk stock a sell?

Turning to guidance, The Trade Desk says investors can expect revenue to decline sequentially in Q1 2026, but rise year over year, to $678 million. Even the y-o-y growth rate, however, will be only 10%, representing continued deceleration.

Management did not give GAAP earnings guidance for Q1, noting only that “adjusted EBITDA” will be “approximately $195 million” – down more than half from Q4 2025.

Long story short, TTD is a 27.5 P/E stock with slowing sales growth and potentially declining profits. That sounds like a sell to me.