If You Had Put $500 into The Trade Desk Stock 5 Years Ago, Here’s What You’d Have Now

Trade Desk Stock Overview

Trade Desk’s stock has returned to levels seen five years ago.

While the company’s business performance remains strong, future guidance suggests a slight slowdown ahead.

Currently, Trade Desk’s stock trades at nine times sales—a significant decrease from its previously high valuations, yet it still retains a solid foundation.

In December 2024, the stock had risen by 156% over the previous two years. At that time, it was valued highly, with metrics like 134 times free cash flow and 30 times sales. Comparatively, its valuation now appears reasonable next to Nvidia, which trades at over 62 times and 30 times its sales.

However, things have shifted recently. Although Trade Desk reported strong revenue figures, this was coupled with conservative market analysis and modest expectations for the future. As a result, many investors experienced a drop in profits.

If someone invested $500 in Trade Desk five years ago, that investment would now be worth approximately $576.

During the same timeframe, the S&P 500 has seen more than double this return, marking a 15.6% total revenue growth compared to Trade Desk’s 2.9% increase.

These days, Trade Desk’s stock has a rating reflecting its price-to-free cash flow ratio at 33 and nine times sales. Even if its stock price were to double, it would still be valued lower than Nvidia.

Nonetheless, caution is warranted; Trade Desk isn’t among companies recognized for deep value. Its multiple valuations are fitting for rapidly growing firms in expansive markets.

This is not to say Trade Desk lacks potential. The company has consistently seen sales grow, and its free cash flow is at an all-time high.

Management’s outlook might not seem overly optimistic for the next quarter, but they anticipate sales growth around 14%. The growth narrative isn’t over, and recent price drops in 2025 have made it more accessible for potential investors.

If contemplating an investment in Trade Desk, it’s worth noting that other options have been highlighted more favorably by analysts. Notably, Trade Desk didn’t make the list of recommended stocks that could provide high returns in the coming years.