Trade Desk Analyst Downgrades To Sell Citing Unsustainable Buyside Expectations, Unhealthy Non-CTV Prospects, Incremental Risks From Google, Apple

Benchmark analyst Mark Zgutowicz downgrades The Trade Desk, Inc. TTD from Hold to Sell with a $38 price target.
Post CEO Jeff Green's bullish 1Q and broad 2023 outlook on the 4Q call, the analyst believes buy-side expectations have rerated to untenable levels while eclipsing overly optimistic consensus expectations.
While CTV ad unit growth remains relatively healthy and on pace to support an estimated ~40% of TTD's gross spend in the next two years, non-CTV development (e.g., mobile and display) does not look healthy as per his channel checks.
The analyst also believes buy-side '23 CTV growth expectations are too high following an abnormally strong 4Q implied growth of 40-50%.
The analyst sees incremental risks to TTD data/signal loss over the next 18 months from Apple Inc's AAPL decision on fingerprinting/Private Relay and Alphabet Inc GOOG GOOGL Google's decision on GAID (Google Ad ID) and Chrome cookies.
Related: Trade Desk Gets Price Target Bumps By Analysts After Upbeat Q4 Earnings
The analyst firmly believes UID2 will provide little to no reprieve to future signal loss, with a negative impact on TTD terminal value with no large publisher UID2 commitments, regardless of a growing list of UID2 ad tech vendor partners.
Lastly, as rates persist higher, the analyst sees a diminishing appetite for TTD shares in risk-adjusted portfolios carrying a ~14x NTM revenue multiple, a rising, high beta, and it's still high U.S. dependency. The latter of which looks to soon shift from tailwind to headwind.
Also Read: You Ask, We Analyze: Here's The Bull And Bear Case For Trade Desk As The Stock Surges Higher
Price Action: TTD shares traded lower by 3.73% at $56.05 on the last check Thursday.