The Trade Desk (NASDAQ:TTD) stock has faced a considerable decline of 40% in 2025, predominantly due to internal restructuring initiatives that affected short-term performance and the slower-than-expected launch of its AI platform, Kokai. This downturn raises a vital question: Is TTD worth buying following this recent drop? We believe it is.
At its present price of approximately $70, TTD stock seems appealing. Our assurance stems from a thorough evaluation that contrasts its current valuation with its historical operating performance and financial health. We have examined The Trade Desk against essential benchmarks, including its growth trajectory, consistent profitability, strong financial integrity, and proven resilience during economic recessions. This comprehensive analysis of TTD’s operational capabilities and financial position leads us to conclude that there is little reason for long-term apprehension regarding the stock. However, if you are looking for higher returns with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and delivering returns exceeding 91% since its launch. Separately, see – BigBear.ai: What’s Happening With BBAI Stock?
How Does The Trade Desk’s Valuation Look vs. The S&P 500?
When evaluating the cost per dollar of sales or profit, TTD stock appears quite expensive in comparison to the overall market.
- The Trade Desk has a price-to-sales (P/S) ratio of 13.4 versus 3.1 for the S&P 500
- Moreover, the company’s price-to-free cash flow (P/FCF) ratio stands at 50.3 compared to 20.9 for the S&P 500
- Additionally, it has a price-to-earnings (P/E) ratio of 83.8 compared to the benchmark’s 26.9
How Have The Trade Desk’s Revenues Grown Over Recent Years?
The Trade Desk’s Revenues have significantly increased over the past few years.
- The Trade Desk has experienced an average growth rate of 25.8% in its top line over the last 3 years (compared to an increase of 5.5% for the S&P 500)
- Its revenues have risen by 25.1% from $2.1 billion to $2.6 billion in the past 12 months (against growth of 5.5% for S&P 500)
- Furthermore, its quarterly revenues increased by 25.4% to $616 million in the most recent quarter from $491 million a year earlier (versus a 4.8% rise for S&P 500)
How Profitable Is The Trade Desk?
The Trade Desk’s profit margins are around the median level for companies within the Trefis coverage scope.
Does The Trade Desk Look Financially Stable?
The Trade Desk’s balance sheet appears very robust.
- The Trade Desk’s Debt figure was $335 million at the conclusion of the latest quarter, whereas its market capitalization is $35 billion (as of 6/25/2025). This results in a very strong Debt-to-Equity Ratio of 1.0% (when compared to 19.4% for S&P 500). [Note: A lower Debt-to-Equity Ratio is preferable]
- Cash (including cash equivalents) constitutes $1.7 billion of the $5.7 billion in Total Assets for The Trade Desk. This results in a very solid Cash-to-Assets Ratio of 30.5%
How Resilient Is TTD Stock During A Downturn?
TTD stock has performed worse than the benchmark S&P 500 index during some recent downturns. While investors hope for a smooth recovery in the U.S. economy, how severe could the impact be if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how major stocks performed during and after the last six market crashes.
Inflation Shock (2022)
- TTD stock declined 64.3% from a peak of $111.64 on 16 November 2021 to $39.89 on 9 November 2022, compared to a peak-to-trough decrease of 25.4% for the S&P 500
- The stock fully bounced back to its pre-Crisis peak by 4 October 2024
- Following that, the stock surged to a high of $139.51 on 4 December 2024 and now trades at around $70
COVID-19 Pandemic (2020)
- TTD stock fell 54.2% from a high of $31.54 on 19 February 2020 to $14.44 on 18 March 2020, versus a peak-to-trough reduction of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 7 May 2020
Putting All The Pieces Together: What It Means For TTD Stock
In conclusion, The Trade Desk’s performance across the factors detailed above is as follows:
- Growth: Extremely Strong
- Profitability: Neutral
- Financial Stability: Extremely Strong
- Downturn Resilience: Very Weak
- Overall: Very Strong
The Trade Desk stock showcases strong performance across the attributes we’ve evaluated. Although its valuation seems high when assessed against the S&P 500 index, it’s presently trading below its own three-year historical average price-to-sales (P/S) ratio of 19x. For comparison, its closest competitor, AppLovin (APP), is trading at a P/S ratio of roughly 25x based on trailing revenues. See – AppLovin Stock: Worth It At $365? Furthermore, the average analyst price target of $86 for TTD indicates a significant upside potential of over 25% from its current position.
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