Trade Desk (TTD) will likely keep seeing top-line growth, but the company is also facing increasing competition from demand-side platforms, or DSPs, Wedbush said in a note Monday.
DSPs represent a "structural disadvantage" to Trade Desk, the note said.
"Competitor platforms that integrate content, data, and commerce into a single environment incentivize ad buyers to remain within that ecosystem rather than routing it through" Trade Desk, Wedbush said.
As advertisers increase their spending on those competitors, Trade Desk may become a "price-taking intermediary rather than a price-setting platform, which pressures take rate, data access, and long-term margins," the note said.
However, for now, Trade Desk is benefitting from linear advertisers' migration to connected TV, a "deep integration" in the media and digital landscape amid expanding partnerships, and a "content-agnostic approach," the note said.
Wedbush lowered Trade Desk's price target to $40 from $50, citing the "increasing competitive pressures" and has neutral rating on the company.
Price: 39.95, Change: -0.10, Percent Change: -0.25
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