Is The Trade Desk, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for The Trade Desk, Inc. has moved from fair to expensive, indicating that the stock is overvalued. Key valuation ratios include a P/E ratio of 85, an EV to EBITDA of 61.64, and a PEG ratio of 0.84, which suggest that the stock is priced significantly higher than its earnings growth potential. In comparison, its peer, which is also in the software products industry, has a P/E of approximately 60.98 and an EV to EBITDA of 41.76, highlighting that The Trade Desk is trading at a premium relative to its peers.
The company's recent stock performance has been notably poor, with a year-to-date return of -57.22% compared to the S&P 500's positive return of 16.30%, reinforcing the notion that the stock may be overvalued given its performance against the broader market.