Is The Trade Desk, Inc. (TTD) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $14.93, The Trade Desk, Inc. (TTD) sits inside our range of estimates: our valuation lenses put the business somewhere between $9.73 and $25.82 per share. For a cyclical we value through the cycle we publish a range only (peer multiples and our researched mid-cycle DCF): where in the cycle the business sits decides where in that range it lands, and a single figure would claim we know that precisely. This is an educational model, not a price target or a recommendation.
The valuation discounts The Trade Desk, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 11.2%, with a long-run terminal growth rate of 2.5%. About 73% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, TTD's modeled DCF value ranges from about $8.31 to $12.27 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what The Trade Desk, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of TTD's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind TTD's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $2,896,284,000 | The Trade Desk Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0001671933-26-000009, filed 2026-02-25) + The Trade Desk FY2025 10-K (accession 0001671933-26-000014, filed 2026-02-27): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 (calendar year): $2,896,284K, +18.5% on FY2024's $2,444,831K. This is NET revenue — TTD's platform fee on clients' gross spend, which was $13.4B in 2025 (release), so the take rate is ~21.6%. UNCHANGED as the base; FY2025 is the last completed year with a filed 10-K. CROSS-CHECK, AND IT IS THE WHOLE STORY: quarterly growth went +12% (Q1 2026, $688.9M derived as H1 $1,403.9M less Q2), +3% (Q2, $715.1M), and Q3 is guided to 'at least $650 million' against $739.4M a year earlier (derived: FY2025 less H1 2025 $1,310.1M less Q4 $846.8M) — about -12%. The base year is the top of the old trajectory, not a launch pad. |
| Base EBIT margin | 20.3% | The Trade Desk Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0001671933-26-000009, filed 2026-02-25): GAAP income from operations $589,321K / revenue $2,896,284K = 20.35% (us-gaap:OperatingIncomeLoss ties). This is AFTER $490.6M of stock-based compensation (16.9% of revenue), which stays expensed per house rule — the release's 'Adjusted EBITDA' of $1,196M (41%) adds it back and is NOT used anywhere in this model. FY2025 includes $67M of CEO performance-grant SBC. CROSS-CHECK on the latest quarter: H1 2026 GAAP operating income $168.2M on $1,403.9M = 12.0% (H1 2025: 13.1%); Q2 2026 alone 14.2% vs 16.8%. Platform operations rose to 26% of revenue from 22% (hosting/data-center costs plus a reclassification of supplier-provided data costs out of contra-revenue, per the 10-Q). FY2025 was the high-water mark of the last four years (FY2022 7.2%, FY2023 10.3%, FY2024 17.5%). |
| Forecast revenue growth | -3% → -3% → 4% → 5% → 5% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide rate shared by every researched model. |
| Beta | 1.20 | Assumption — normalized estimate; anchor = Yahoo/yfinance 5Y-monthly beta: Published 5Y-monthly beta 0.992 (yfinance, 2026-10-05). Normalized UP to 1.20 — CONSERVATIVE, it raises the discount rate and lowers the value. Reasons: (1) TTD's revenue is a direct claim on discretionary ad budgets, and management attributed the Q3 decline partly to CPG and auto advertisers (~25% of spend) pulling back — that is macro exposure a 0.99 understates; (2) the published figure is dominated by a ~90% idiosyncratic collapse that a market regression reads as noise; (3) published betas of the ad-tech and ad-funded set the same day: Magnite 2.32, PubMatic 1.56, AppLovin 2.56, Alphabet 1.21, Meta 1.19, DoubleVerify 1.00, Pinterest 0.90 — median ~1.2. Using the published 0.992 instead gives ~$10.69/share. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (about long-run nominal GDP), well below the 11.24% WACC. Fair for a business that still sits on growing CTV and retail-media budgets, but it assumes TTD stops losing share; 2.0% takes ~$0.29/share off. |
| Diluted shares | 473M | The Trade Desk special-meeting proxy, DEF 14A (accession 0001671933-26-000102, filed 2026-09-18): 429,686,475 Class A + 43,108,629 Class B shares outstanding on the 2026-09-14 record date = 472.8M. USED IN PLACE OF the Q2 10-Q weighted-average diluted count (469.9M) because the actual outstanding count is already higher than that diluted average, and at ~$12 almost no options are in the money, so the treasury-method add-on is negligible. Conservative by ~0.6% (469.9M would give ~$9.78). Future dilution is NOT in this count: the board's option REPRICING of up to 15.58M options (strikes $3.69-$122.59, put to a 2026-10-19 vote) and the 7.0M-share CEO performance option struck at $14.97 (2026-09-14) both become dilutive in any recovery. Their cost is meant to be captured by expensing SBC in EBIT, not here. |
| Market price | $14.93 | Delayed quote · as of 2026-11-10 05:04 UTC |
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