TTD Fell 37% In A Month. What To Do Now?
Trade Desk (TTD) stock is down 37.4% in 21 trading days. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:
- Size: A $26 Bil company with $2.7 Bil in revenue currently trading at $53.20.
- Fundamentals: Last 12 month revenue growth of 23.2% and operating margin of 17.7%.
- Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.3
- Valuation: Currently trading at P/E multiple of 62.6 and P/EBIT multiple of 54.9
- Has returned (median) 52.4% within a year following sharp dips since 2010. See TTD Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for TTD, see Buy or Sell TTD Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and TTD drops another 20-30% to $37.24 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Trade Desk (TTD) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: TTD provides a cloud-based platform enabling buyers to create, manage, and optimize data-driven digital advertising campaigns globally.
2022 Inflation Shock
- TTD stock fell 64.3% from a high of $111.64 on 16 November 2021 to $39.89 on 9 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 4 October 2024
- Since then, the stock increased to a high of $139.51 on 4 December 2024 , and currently trades at $53.20
| TTD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -64.3% | -25.4% |
| Time to Full Recovery | 695 days | 464 days |
2020 Covid Pandemic
- TTD stock fell 54.2% from a high of $31.54 on 19 February 2020 to $14.44 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 May 2020
| TTD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -54.2% | -33.9% |
| Time to Full Recovery | 50 days | 148 days |
2018 Correction
- TTD stock fell 35.6% from a high of $6.65 on 13 October 2017 to $4.28 on 9 February 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 May 2018
| TTD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -35.6% | -19.8% |
| Time to Full Recovery | 91 days | 120 days |
Worried that TTD could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.