The Trade Desk is stuck in a painful post-earnings grind — down nearly 8% over the past month and trading at $22.18, with short sellers adding to positions even as the stock attempts a 5% weekly bounce.
Short interest is a genuine weight here. At 17.5% of the free float, the position has climbed steadily from around 16.1% in mid-April, adding roughly 1.4 percentage points as the stock was sold off following May 8 results. The week-on-week increase is modest — about half a percentage point — but the one-month accumulation of 8% in share count tells the fuller story: bears have been methodically building since the Q1 report disappointed on guidance. The borrow market itself offers no squeeze catalyst. Availability is wide at 701% — meaning there are roughly seven shares available to borrow for every one currently shorted — and cost to borrow is negligible at 0.40%, barely changed week-on-week. With the lending pool this open and borrowing this cheap, there is nothing forcing a short squeeze.
Options tell a different story than the shorts. The put/call ratio has actually drifted lower this week to 0.498, sitting 1.5 standard deviations below its 20-day average of 0.53. That is close to a 52-week low for the ratio. Options traders, in other words, have been rotating toward calls rather than puts — an unusually bullish lean for a stock with this level of short interest and this much recent price damage. That divergence between the options and the short book is the most interesting tension in the setup right now.
The Street took a saw to price targets after the Q1 release. The direction of travel was almost universally downward: most firms that maintained Buy or Outperform ratings still cut targets sharply — Truist from $50 to $35, Benchmark from $40 to $30, RBC Capital from $35 to $33. HSBC went further and downgraded to Reduce with a $20 target, while William Blair stepped back to Market Perform. The mean analyst target now sits around $25.80, roughly 16% above current levels — but after such a broad round of cuts, that implied upside reflects the gap that opened up rather than fresh conviction. The bull case centres on TTD's dominance in open-internet programmatic buying and record joint business planning momentum in connected TV. The bear case is the Q2 guide: both revenue and EBITDA guidance came in below expectations, flagging macro client conflicts and a possible take-rate squeeze from intensifying competition. The forward EPS growth trajectory scores in the 90th percentile across the universe — the earnings-growth story is intact — but the earnings surprise factor ranks just in the 25th percentile, a reminder that the company has been missing or barely meeting near-term numbers recently.
Earnings history underlines how poorly the stock has absorbed results. The Q1 report triggered an 8.4% one-day decline and an additional leg lower over the following five days for a total five-day move of roughly minus 10%. The May 7 event recorded a similar pattern — down 3.9% on the day, then minus 15% on the five-day window. Two consecutive earnings reactions of that shape have clearly contributed to the short buildup. The next event is August 7.
The key watch for the coming weeks is whether institutional positioning shifts. State Street added a significant 13.9 million shares in the most recent filing period, bringing its stake above 9.5%. BlackRock added 1.8 million shares. Two Sigma built a position of 8.1 million shares. Those are meaningful votes of longer-term confidence — but they predate the May selloff, and the Q2 guide has not made the near-term picture any cleaner. How the stock behaves around $20-22 support — and whether the unusually call-heavy options positioning proves prescient or premature — is what to watch heading into summer.
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