Should You Buy The S&P 500's Worst-Performing Stock in 2025?

• The Trade Desk is 1 of the worst-performing stocks successful the S&P 500.

• Competition from Amazon, enforcement departures, and gross slowdown each compounded for a 66% drawdown.

• However, downside looks constricted from present arsenic the institution invests successful the aboriginal of integer advertising.

• 10 stocks we similar amended than The Trade Desk ›

The Trade Desk (NASDAQ: TTD), a erstwhile highflying integer advertizing disruptor, has fallen connected hard times this year.

Just however hard? The erstwhile marketplace darling is cervix and cervix with fiscal banal Fiserv arsenic the worst-performing banal successful the S&P 500 Index successful 2025, having shed 66.2% of its worth this twelvemonth done Dec. 9.

A diminution similar that could portend longer-term secular problems, but could besides awesome a buying opportunity. So, which is it for the Trade Desk? Let's excavation in.

The problems for The Trade Desk emerged aboriginal successful the year, erstwhile the institution missed gross estimates for its fourth-quarter 2024 net merchandise successful February. That ignominiously marked the company's archetypal "miss" successful 33 quarters, oregon 8 years, arsenic a nationalist company.

Revenue did turn much than 22% that quarter, truthful it wasn't arsenic if results wholly fell disconnected a cliff. Still, this twelvemonth is connected gait for a important deceleration successful growth. Factoring successful The Trade Desk's fourth-quarter outlook, gross is connected gait for $2.89 billion, which would people 18.2% maturation -- an 8-percentage-point deceleration from 2024.

In addition, margins are expected to compress, with adjusted (non-GAAP) net per stock projected to turn by conscionable 7.2% successful 2025.

Again, these aren't atrocious numbers by immoderate means, but with the banal entering the twelvemonth trading astir 71 times adjusted EPS, determination wasn't overmuch country for error.

There are respective reasons for the lackluster fiscal show compared with expectations, including immoderate morganatic concerns and others that are not wholly the company's fault. First, The Trade Desk is simply a demand-side programmatic advertizing platform, and 2025 has a pugnacious examination with the 2024 predetermination year. Election years typically spot elevated advertisement spending, which astir apt explains the acceleration successful 2024 gross and the consequent deceleration this year.

Second, determination has been a accelerated gait of spending this year, arsenic The Trade Desk invested successful a large overhaul of its integer advertisement information marketplace, introducing a caller work called Audience Unlimited that utilizes generative AI-based recommendations for advertisers. The institution has besides introduced respective innovations related to one-to-one advertiser-to-publisher nonstop deals, including Deal Desk and OpenPath.