Jefferies raises Reddit stock price target to $300 on revenue growth outlook

Investing.com - Jefferies raised its price target on Reddit (NYSE:RDDT) to $300.00 from $230.00 on Wednesday, maintaining a Buy rating on the social media platform’s shares. The new target represents potential upside from the current price of $240.20, with Reddit’s market capitalization now standing at approximately $45 billion.

The investment firm cited the sustainability of revenue growth as the key debate surrounding Reddit following an acceleration to multi-year highs and a recent stabilization in daily active user (DAU) trends. InvestingPro data shows impressive revenue growth of nearly 70% over the last twelve months, supported by robust gross profit margins of 91%.

Jefferies’ analysis of market share trajectories for peers during early stages of monetization suggests Reddit could see over 35% upside to consensus revenue estimates for 2027.

The firm also highlighted data licensing as an "underappreciated call option" that could drive even greater upside to EBITDA for the social media company.

These factors support Jefferies’ bull case for Reddit stock and create what the firm describes as "an attractive risk-reward" profile for investors.

In other recent news, Reddit reported strong second-quarter results, with revenue and EBITDA exceeding the high end of guidance by $70 million and $37 million, respectively. Advertising revenue growth accelerated to 84% year-over-year, showcasing significant momentum. Deutsche Bank raised its price target on Reddit to $205, maintaining a Buy rating, citing strong second-quarter performance and better-than-expected third-quarter guidance. Global daily active users grew 21% year-over-year to 110.4 million, surpassing analyst expectations. Morgan Stanley also increased its price target to $230, highlighting better-than-expected user metrics. Citizens JMP raised its price target to $225, maintaining a Market Outperform rating, following the earnings report. BofA Securities increased its price target to $180, citing strong execution and a 50% rise in advertiser adoption. RBC Capital maintained a Sector Perform rating with a price target of $210, focusing on growth sustainability. These developments reflect positive analyst sentiment and robust financial performance for Reddit.

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