In a report released today, Justin Post from Bank of America Securities reiterated a Hold rating on Reddit Inc Class A (RDDT – Research Report), with a price target of $130.00.
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Justin Post has given his Hold rating due to a combination of factors that balance Reddit’s strong financial performance with potential risks. Reddit’s recent quarterly results showed impressive revenue and EBITDA figures that exceeded market expectations, driven by significant growth in advertising revenue and daily active users. The company’s monetization strategies, including underutilized advertising opportunities, suggest continued revenue growth potential.
However, Justin Post also highlights concerns that justify a Hold rating. The dependency on Google for traffic poses a risk, especially with the emergence of AI-driven search results that could impact user engagement. Additionally, Reddit’s current premium valuation already reflects much of the anticipated growth, limiting further upside potential. The expected deceleration in revenue growth in the latter half of the year also contributes to the cautious stance, suggesting that while Reddit’s prospects are promising, they are tempered by these uncertainties.
In another report released yesterday, Bernstein also upgraded the stock to a Hold with a $130.00 price target.
Based on the recent corporate insider activity of 122 insiders, corporate insider sentiment is neutral on the stock.