The Trade Desk‘s stock tumbled nearly 11% today after Morgan Stanley downgraded the adtech company to “equal-weight,” saying that cracks are showing in its core connected TV business.
Video ad billings slowed to 11% growth last quarter, down from more than 30% in prior periods, stoking fears that competition and advertiser frustration are dragging on performance.
“We have been wrong about the durability of TTD’s growth in the face of lingering execution concerns, softness in the open web ad market, and intensifying competition in CTV,” analysts wrote in a note.
They also flagged advertiser pushback on fees, noting that The Trade Desk’s take rate is nearly double that of rival DSPs.