Shares of The Trade Desk (TTD) fell over 4% on Thursday. Rothschild & Co Redburn initiated coverage on the stock with a Sell rating. Analyst Bianca Dallal set an $11 price target, representing a potential 50% downside.
The report cited a new reality for ad-tech firms due to intensifying competition from AI advertising tools. Competitors such as Google and Amazon are now offering some programmatic services at zero cost. This shift puts significant pressure on the company's current 20% take-rate.
The competitive landscape is expected to result in slower growth for gross spending. Dallal warned that current consensus estimates do not yet reflect this projected take-rate compression.