Brian Nowak, an analyst from Morgan Stanley, maintained the Buy rating on Reddit Inc Class A. The associated price target was raised to $230.00.
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Brian Nowak’s rating is based on Reddit Inc’s impressive revenue growth and strong innovation pipeline, which indicate significant potential for future expansion. The company’s revenue increased by approximately 78% year-over-year in the second quarter, surpassing expectations, and it continues to show momentum with a 56% year-over-year growth forecast for the third quarter. This growth is largely driven by the company’s expanding advertising offerings and increasing advertiser base, with a notable 50% rise in the number of advertisers year-over-year.
Additionally, Reddit is implementing multiple initiatives to drive user growth, including improving user onboarding and search experiences. The company has also seen a stabilization in user numbers, with a sequential increase in daily active users both in the US and internationally. These factors, combined with strategic investments in sales and marketing, suggest a long runway for growth, leading to Nowak’s optimistic Buy rating.
In another report released today, Citizens JMP also maintained a Buy rating on the stock with a $225.00 price target.