Highly rated growth stocks are experiencing big share price declines on the mere hint of a sales and earnings slowdown which explains why $31 billion marketing technology company Trade Desk (TTD:NASDAQ) slumped after it cut fourth quarter guidance.

The stock has fallen 21% since publishing third quarter results on 9 November, in which it dropped the growth bombshell that EBITDA (earnings before interest, tax, depreciation and amortisation) would be nearer $270 million rather than the $291 million consensus on revenue of $580 million versus $610 million expected.

Investors are clearly disappointed, although this is not the first time the stock has fallen sharply. It is a volatile stock that has suffered steep declines multiple times this year alone, even if the company has a solid track record for meeting or beating estimates overall.

The shares remain highly rated even after the latest share price slump, trading on 45 times forecast earnings for the next 12 months versus an industry median rating of 14-times, according to LSEG data. 

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