Trade Desk Stock Collapses. It Looks Like a Dip-Buying Opportunity, Analysts Say.

“Buy the dip on temporary ad headwinds,” said Jason Helfstein, an analyst at Oppenheimer. That seems to be the sentiment across Wall Street, where analysts have trimmed their price targets but maintained bullish ratings on the stock. Helfstein held his Outperform rating on Trade Desk, lowering the price target to $85 from $95.

Analysts are maintaining their convictions that the stock is a buy despite advertising headwinds, which, if true, could mean that the shares are oversold after the outlook-driven slide and may be a value buy.

“More limited visibility is clearly going to impact sentiment, but there was nothing within the quarter that was indicative that core secular tailwinds … have changed, and we remain constructive on the long-term trajectory,” said Citi’s Ygal Arounian, maintaining his Buy rating with a price target of $68. “Temporary dislocation from macro factors could be the buying opportunity many were looking for,” he added.

Matthew Swanson, an analyst at RBC Capital Markets, has a similar view, noting they “remain bullish on the long-term strategic growth opportunity.” Swanson held his Outperform rating, lowering the price target to $90 from $100.

For Justin Patterson, an analyst at KeyBanc Capital Markets, the stock’s setback was a “speed bump, not structural” for Trade Desk. Patterson held his Overweight rating but trimmed the price target on the stock to $84 from $100.

“We underappreciated the degree to which The Trade Desk would be caught in the brand ad spend pause that social advertisers experienced,” Patterson said. “However, if we assume the bulk of the revenue revision is from transitory factors, The Trade Desk now has a clear path toward reaccelerating growth.”

Write to Jack Denton at jack.denton@barrons.com