Wedbush analysts on Tuesday initiated coverage of Trade Desk Inc (NASDAQ:TTD) with a ‘Neutral’ rating and $50 per share price target, citing accelerating competition from Amazon’s Delivery Service Partner (DSP) that has begun to erode Trade Desk’s future growth potential.
In a note to clients, the analysts wrote that Amazon is taking a bigger share of advertising budgets due to its ecommerce data and expanding partnerships with major connected TV (CTV) players, including Roku, Disney, and Netflix.
They view Trade Desk’s attempt to limit market share erosion by building its own content-agnostic CTV platform as being a costly venture with limited potential given the vast reach of existing platforms.
The analysts, though, believe Trade Desk will continue to trade at a premium to most of its peers, given the company’s large and still-expanding client base and strong positioning against traditional media advertisers.
Trade Desk reports its third quarter results on November 6, and the Wedbush analysts forecast solid Q4 guidance with revenue of $830 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $366 million, as the company’s Kokai adoption rises.
Trade Desk shares slipped 2.5% in midday trading on Tuesday.