Best Undervalued Stock to Buy: Adobe Stock or The Trade Desk Stock? | ADBE STock vs. TTD Stock

Parkev Tatevosian, CFA•Jul 8, 2026

Summary

Parkev Tatevosian, CFA provides a head-to-head comparison of Adobe and The Trade Desk, noting that both stocks have underperformed significantly in recent years due to specific headwinds. Parkev Tatevosian, CFA points out that Adobe faces risks from artificial intelligence and leadership transitions, while The Trade Desk is battling competition from 'walled gardens' like Amazon. Despite these challenges, Parkev Tatevosian, CFA highlights that both companies have improved their revenue per employee and maintain strong profitability, which gives them the flexibility to navigate market pressures.

Parkev Tatevosian, CFA observes that the stock market currently views both businesses as permanently impaired, pricing them at their lowest forward P/E ratios in history. However, Parkev Tatevosian, CFA disagrees with this assessment, using discounted cash flow models to show that both stocks are trading at massive discounts to their fair values. Ultimately, Parkev Tatevosian, CFA favors Adobe as the immediate pick because of its higher operating margins and the potential for a 10% to 30% price bounce once a new CEO is announced.

Adobe (ADBE): Parkev Tatevosian, CFA identifies Adobe as a top pick due to its industry-leading operating margins of nearly 37% and a robust 39.6% return on invested capital. Parkev Tatevosian, CFA calculates a fair value of $382 per share, suggesting the current market price of $220 is a major undervaluation. Parkev Tatevosian, CFA believes the search for a new CEO serves as a near-term catalyst that could provide an immediate boost to the share price.

The Trade Desk (TTD): Parkev Tatevosian, CFA notes that The Trade Desk is trading at a forward P/E of 10, the cheapest level in its history. Parkev Tatevosian, CFA emphasizes that the company has successfully turned its profitability around through cost-cutting, reaching 20% operating margins recently. Parkev Tatevosian, CFA values the stock at $50 per share using a discounted cash flow model, which is significantly higher than the current market price of $19.

Mentioned Stocks

TTD

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev Tatevosian, CFA believes The Trade Desk is a strong buy because it is trading at an all-time low forward P/E of 10. Parkev Tatevosian, CFA notes that management has successfully restored operating margins to over 20% through cost-cutting measures. Parkev Tatevosian, CFA's internal valuation model places the fair value at $50 per share, while the stock is currently trading at only $19.

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ADBE

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev Tatevosian, CFA argues that Adobe is exceptionally undervalued, trading at a forward P/E of just 9, the lowest in its history. Parkev Tatevosian, CFA highlights its high operating margins of 37% and ROIC of nearly 40% as signs of a high-quality business. Parkev Tatevosian, CFA calculates a fair value of $382 against a current price of $220 and anticipates a 10-30% price increase following the appointment of a new CEO.

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