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The Trade Desk’s Stock Performance: A Cautionary Tale for Growth Investors
The Trade Desk’s Stock Performance: A Cautionary Tale for Growth Investors
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BTCCSquare news:
Five years ago, a $500 investment in The Trade Desk (TTD) WOULD now be worth just $576, reflecting a meager 2.9% compound annual growth rate. This pales in comparison to the S&P 500's 15.6% CAGR over the same period. Once a market darling trading at 134 times free cash flow, TTD now sits at 33 times free cash flow—still premium, but far from its former highs.
The digital advertising firm's recent earnings, while solid, failed to meet sky-high expectations. Forward guidance disappointed investors, erasing years of gains in a brutal market correction. Yet even at current levels, TTD trades at half the valuation multiples of AI juggernaut Nvidia—a reminder that growth stocks carry asymmetric risks.
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