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We recently published a list of 10 Advertising & Media Stocks That Could Tank If Recession Hits. In this article, we are going to take a look at where The Trade Desk, Inc. (NASDAQ:TTD) stands against other advertising & media stocks that could tank if recession hits.
When recession strikes, the advertising and media sectors are the first ones to see a noticeable impact. Companies tend to reduce their advertising budgets when the going gets tough. As a result, media companies that rely heavily on advertising spending fail to hit their revenue targets. So, if investors want to look at red flags for recession, advertising and media stocks offer good insights.
While media companies across the board feel the heat of reduced advertising budgets, some companies tend to fare better. These are mostly the ones that have diversified their income streams to reduce reliance on advertising.
In this post, we look at stocks that are likely to struggle if ad spending goes down. To come up with our list of top 10 advertising and media stocks that could tank if recession hits, we only looked at stocks that had a market cap of at least $5 billion.
A large array of computer screens and tech equipment representing the technology company's self-service cloud-based platform.
The Trade Desk, Inc. (NASDAQ:TTD)
The Trade Desk, Inc. (NASDAQ:TTD) is a technology company. It provides a self-service cloud-based ad-buying platform that enables buyers to optimize, manage, plan, and measure data-driven online ad campaigns. The tech firm serves advertisers, advertising agencies, and other service providers for advertisers or agencies.
For the first time in 8 years, The Trade Desk (NASDAQ:TTD) missed revenue guidance in the most recent quarter. It also fell short of guidance on the profitability front, missing adjusted EBITDA estimates. Management highlighted that this miss was due to a series of minor execution missteps. However, the tech firm still ended the quarter with no debt and $1.9 billion of cash.
Due to the guidance miss and tariff concerns, the stock has gone through major headwinds. The share price has experienced a significant decline, falling 52% so far this year.
At the current price level, the stock presents a compelling buying opportunity as recession worries seem priced in. Wall Street analysts have shown their optimism through Buy ratings on the stock. Based on 39 analysts’ ratings, the company has a higher target price of $150, highlighting that the share price could nearly triple from its current price levels in the case of a bull scenario. With such an attractive upside of 209% along with the current stock price dip, the opportunity is enticing.