Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 8.8 |
| EV/EBITDA | 7.1 |
| Fwd P/E | 8.3 |
| PEG | 6.2 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.2x
- ▸PEG: 1.20
TTD · Why this verdict
Why The Trade Desk (TTD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The Trade Desk combines a wide economic moat, exceptional free cash flow conversion of 132%, and an attractive forward P/E of 9x with a Piotroski score of 8/9, but is currently in a confirmed death cross downtrend with 21% short interest and negative asymmetry at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The Trade Desk carries an economic moat designation with 132% free cash flow conversion relative to net income, a Piotroski score of 8 out of 9, and a forward P/E of 9.0x, reflecting a business with durable competitive positioning trading at a depressed valuation. Quality breakdown | Free cash flow margin expands or remains above 15% over the next 12 months, confirming the moat is translating into durable cash returns. | ↓Deteriorating |
| CounterThe moat assessment may overstate durability in digital advertising, where platforms like Google and Amazon can easily redirect ad spend away from programmatic buyers. | ||
The stock is in a confirmed downtrend with a death cross, trading below all moving averages and with the 200-day slope declining at negative 17.6% over 30 days, which is the steepest decline in the assigned batch and signals broad institutional liquidation. Momentum breakdown | The stock closes above its 200-day moving average for at least 10 consecutive trading days, confirming a trend reversal. | Tripped↑Improving |
| CounterWith RSI at 35 and the stock near technical support, the setup may be approaching an oversold bounce rather than continued deterioration. | ||
A 21% short interest combined with a quality score of 7.5 and high implied volatility of 74% creates the conditions for a potentially violent short squeeze if earnings or macro data catalyze a sentiment shift. Risk breakdown | Short interest falls below 12% within the next 12 months as the downtrend resolves and short sellers cover. | ↑Improving |
| CounterHigh short interest in a death cross environment often reflects well-informed institutional views; the shorts may be correct that growth is decelerating. | ||
Earnings estimates are trending downward, recent analyst sentiment is weakened, and the most recent quarter came in essentially flat with expectations, suggesting the growth re-acceleration needed to justify re-rating has not yet materialized. Bear case | Earnings estimates stop declining and stabilize or rise within the next 2 quarters, signaling the bottom of the estimate revision cycle. | ↑Improving |
| CounterThe company has beaten estimates in 2 of the last 4 quarters and prior beats were as large as 14.6%, suggesting the downtrend in estimates may already be close to a trough. | ||
The Trade Desk carries an economic moat designation with 132% free cash flow conversion relative to net income, a Piotroski score of 8 out of 9, and a forward P/E of 9.0x, reflecting a business with durable competitive positioning trading at a depressed valuation.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow margin expands or remains above 15% over the next 12 months, confirming the moat is translating into durable cash returns.
CounterThe moat assessment may overstate durability in digital advertising, where platforms like Google and Amazon can easily redirect ad spend away from programmatic buyers.
The stock is in a confirmed downtrend with a death cross, trading below all moving averages and with the 200-day slope declining at negative 17.6% over 30 days, which is the steepest decline in the assigned batch and signals broad institutional liquidation.
Tripped↑ImprovingMomentum breakdown
- Expectation
- The stock closes above its 200-day moving average for at least 10 consecutive trading days, confirming a trend reversal.
CounterWith RSI at 35 and the stock near technical support, the setup may be approaching an oversold bounce rather than continued deterioration.
A 21% short interest combined with a quality score of 7.5 and high implied volatility of 74% creates the conditions for a potentially violent short squeeze if earnings or macro data catalyze a sentiment shift.
↑ImprovingRisk breakdown
- Expectation
- Short interest falls below 12% within the next 12 months as the downtrend resolves and short sellers cover.
CounterHigh short interest in a death cross environment often reflects well-informed institutional views; the shorts may be correct that growth is decelerating.
Earnings estimates are trending downward, recent analyst sentiment is weakened, and the most recent quarter came in essentially flat with expectations, suggesting the growth re-acceleration needed to justify re-rating has not yet materialized.
↑ImprovingBear case
- Expectation
- Earnings estimates stop declining and stabilize or rise within the next 2 quarters, signaling the bottom of the estimate revision cycle.
CounterThe company has beaten estimates in 2 of the last 4 quarters and prior beats were as large as 14.6%, suggesting the downtrend in estimates may already be close to a trough.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.1 |
| ROA | 4.2 |
| Gross margin | 10.0 |
| Op margin | 5.7 |
| Net margin | 6.8 |
| Current ratio | 6.2 |
| FCF quality | 9.8 |
| Moat | 7.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 143% FCF/NI
- ▸Rule of 40: 22 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
1.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 0.0 |
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -15.0%/30d — confirmed downtrend
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.4 |
| Analyst rating | 5.0 |
| Price target | 4.2 |
Insider
3.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 2.8 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $1,134,816 (0.017% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 7.4 |
| growth rank | 3.3 |
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.2 |
| support resistance | 8.1 |
| 52w position | 0.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 5.3 |
| volatility | 0.0 |
| put call | 7.8 |
| implied vol | 2.6 |
| max pain risk | 7.0 |
| beta | 6.9 |
| debt equity | 9.3 |
| news risk | 3.0 |
- ▸Short squeeze setup: 21% short, quality 7.5
- ▸High IV: 64%
Catalyst
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:81d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-0.9=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.86
Upside
-12.9%
Downside
15.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 33, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -84% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 6.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.0<4.5, ASYMMETRY:-0.9=NEGATIVE, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -0.86 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 6.7, Value at 6.6, and Peer rank at 5.7; the weakest are Growth at 1.6, Momentum at 3.0, and Insider at 3.6. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.86 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Cash Conversion
Trip ifFree cash flow conversion falls below 80% of net income for at least 2 consecutive quarters.
- P2Death Cross DowntrendTripped
Trip ifStock price drops below $16, more than 17% below the current $19.27, accelerating the downtrend.
- P3Short Squeeze Potential
Trip ifShort interest rises above 25% of the float, signaling intensified bearish conviction.
- P4Earnings Trend Declining
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.