Weak ad spending is denting Trade Desk's fourth-quarter revenue forecast
The shares of Trade Desk Inc (NASDAQ:TTD) are experiencing a sharp post-earnings bear gap. Down 21% at $60.65 at last glance, the stock is hitting its lowest levels since April. Though the ad-tech name announced better-than-expected third-quarter results, its dismal fourth-quarter revenue forecast immediately sent the shares crumbling after the close yesterday. Weaker ad spending in the auto and entertainment industries amid the SAG-AFTRA strike and Israel-Hamas war were cited in the weak guidance.
No fewer than 12 analysts chimed in with steep price-target cuts after the event, including Evercore ISI to $65 from $100. The analyst at Needham noted this as an opportunity to buy Trade Desk shares on the dip, however.
Unsurprisingly, TTD is seeing a surge of options activity today. So far, 64,000 calls and 69,000 puts have been exchanged, which is already 15 times the average daily options volume. The November 60 put is the most popular, with new positions being bought to open there.
On the charts, this negative price action has placed Trade Desk stock just below former support at its 320-day moving average, as well as the $65 level, which caught the stock's pullback late last month. On the short sell restricted (SSR) list today amid the volatility, TTD is still up 40.6% since the start of the year.