Why Is The Trade Desk Stock Crashing, and is it a Generational Buying Opportunity? | TTD Stock

Parkev analyzes the recent financial performance of The Trade Desk, expressing significant disappointment as the company missed expectations across the board. Parkev highlights that revenue grew by only 3% to $715 million, a sharp deceleration compared to previous periods, while net income dropped from $90 million to $64 million. Parkev is particularly concerned about the guidance for the third quarter, which suggests a year-over-year revenue decline to $650 million compared to $739 million in the prior year, despite the company increasing its operating expenses in sales and marketing.

Parkev also critiques management's capital allocation strategy, noting that share buybacks were reduced to $241 million for the first half of the year compared to over $600 million in the same period last year, even though the stock price is significantly lower. Parkev mentions that the stock is currently trading at a forward price-to-earnings ratio of 8.1, a level he considers remarkably cheap. Parkev plans to hold most of his position to wait for signs of business stabilization, though he intends to sell a portion of his holdings later this year for tax-loss harvesting purposes.