Why The Trade Desk Stock Dropped Today

By Rich Smith – Feb 26, 2026 at 10:11AM ESTKey PointsThe Trade Desk beat on top and bottom lines last night.GAAP earnings growth, however, was weak, and guidance suggests sales growth is still slowing.NASDAQ: TTDThe Trade DeskMarket Cap$12BToday's Changeangle-down(-4.85%) $1.22Current Price$23.94Price as of February 26, 2026 at 11:39 AM ETThe Trade Desk just guided for "adjusted EBITDA" to be cut in half.The Trade Desk (TTD 4.85%) 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%. ExpandNASDAQ: TTDThe Trade DeskToday's Change(-4.85%) $-1.22Current Price$23.94Key Data PointsMarket Cap$12BDay's Range$21.09 - $24.3252wk Range$21.09 - $91.45Volume1.1MAvg Vol14MGross Margin78.81% 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.Read NextMay 9, 2025 •By Rich SmithWhy The Trade Desk Stock Soared After EarningsMay 8, 2020 •By Dan CaplingerStock Market News: Elon Musk Keeps Fighting; Ad Fears Sink 2 Top StocksNov 11, 2019 •By Dan CaplingerWhy Boeing, The Trade Desk, and Carbonite Jumped TodayApr 18, 2019 •By Daniel Sparks2 Fast-Growing Companies for Your WatchlistFeb 20, 2019 •By Dan CaplingerWhy Southwest Airlines, The Trade Desk, and Wix.com Slumped TodayAbout the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolStocks MentionedThe Trade DeskNASDAQ: TTD$23.94 (4.85%) $1.22*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.