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Investing.com - Morgan Stanley has raised its price target on Reddit (NYSE:RDDT) to $250.00 from $230.00 while maintaining an Overweight rating on the social media platform’s stock. The new target represents a 28.6% upside from Reddit’s current price of $194.42, though InvestingPro data suggests the stock is trading above its Fair Value.
The investment bank cited improvements in automation, recommendation models, and ad formats as key factors driving durable growth for the company. This aligns with Reddit ’s impressive 69.97% revenue growth over the last twelve months.
Morgan Stanley has increased its revenue forecasts for Reddit, raising 2026 estimates by 3% and 2027 estimates by 4% based on these operational improvements. The company boasts exceptional gross profit margins of 91.04%, giving it substantial room to invest in these growth initiatives.
The firm noted that Reddit’s ability to drive higher user retention and user growth through improved personalization and onboarding processes will be crucial for potential multiple expansion.
Morgan Stanley’s updated $250 price target reflects increased confidence in Reddit’s long-term growth trajectory as the platform continues to enhance its technological capabilities and user experience.
In other recent news, Reddit Inc. reported strong financial results for Q2 2025, with significant year-over-year revenue growth and an increase in daily active users. The company’s revenue exceeded its guidance by $40 million, with advertising revenue growing by 74% compared to the previous year. RBC Capital noted Reddit’s impressive revenue performance, although there was a slowdown in U.S. daily active users, which later showed improvement in September.
Jefferies maintained its Buy rating on Reddit, setting a price target of $300, highlighting the company’s ability to enhance advertiser spending through performance improvements and new product offerings. Citizens reiterated its Market Outperform rating with the same price target, citing Reddit’s stellar quarterly results. Meanwhile, Goldman Sachs raised its price target to $238, maintaining a Neutral rating and pointing to Reddit’s efforts in user personalization and onboarding as positive factors. These developments reflect a positive outlook for Reddit, with strong financial performance and strategic initiatives being well-received by analysts.
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