Key Points
The Trade Desk delivered yet another quarter of disappointing financial results.
Wall Street responded with a flurry of downgrades and price target cuts.
Shares of The Trade Desk (NASDAQ: TTD) plunged anew on Friday, falling as much as 27.3% to lows not seen since early 2019. As of 10:48 a.m. ET, the stock was still down 19.8%.
The catalyst that sent the adtech specialist swooning was the latest in a growing string of abysmal financial reports.
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Dimming prospects
For the second quarter, The Trade Desk generated revenue that grew just 3% year over year to $715 million. The weak growth weighed on the company's profitability as adjusted earnings per share (EPS) slumped 17% to $0.34.
To give the results context, analysts' consensus estimates called for revenue of $753 million and EPS of $0.18.
CEO Jeff Green didn't mince words, noting that, "This quarter did not meet the standard we set for ourselves, but it has reinforced our belief that we are focused on the right opportunities for the future."
To make matters worse, The Trade Desk issued weak guidance, calling for Q3 revenue of $650 million, far below analysts' expectations of $807 million. In light of the disappointing results, Wall Street rushed to adjust its models, hitting the company with a flurry of downgrades and price target cuts.
The Trade Desk has been beset with challenges since early last year, when the company missed its own guidance for the first time as a public company -- in a streak that spanned 33 quarters. At the time, management cited a series of execution missteps for the miss, but since then, things have gone from bad to worse.
The company's recent high-profile dispute with Publicis Group didn't help matters, as the ad agency advised clients to stop spending on The Trade Desk's platform. The spat was resolved in early June, but not before the damage was done.
At 16 times earnings, The Trade Desk stock is at its lowest valuation ever. However, only time will tell whether this is a screaming bargain or a falling knife, so investors should exercise care.
Danny Vena, CPA has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.