Street Calls of the Week
Investing.com - Piper Sandler has raised its price target on Reddit (NYSE:RDDT) to $290.00 from $210.00 while maintaining an Overweight rating on the stock. The social media platform, currently trading at $278.32 with a market capitalization of $52.36 billion, has shown impressive growth with revenue surging nearly 70% in the last twelve months. According to InvestingPro analysis, the stock is trading above its Fair Value, with multiple valuation metrics suggesting rich pricing levels.
The research firm cited positive advertising metrics checks as the primary reason for the increased target, noting that recent dialogue with the company had been "upbeat," particularly regarding product developments.
Piper Sandler views the recent Anthropic lawsuit as a "bullish signal" for Reddit’s data licensing revenue potential, suggesting strengthened prospects in this business segment.
The firm has adjusted its financial projections for Reddit , increasing its fiscal year 2026 revenue estimates by 2% and EBITDA forecasts by 11%.
Reddit, which went public earlier this year, has been expanding its advertising business and exploring additional revenue streams including data licensing for artificial intelligence training.
In other recent news, Reddit has seen a series of analyst upgrades, with several firms raising their price targets to $300. JMP Securities increased its target from $225, citing Reddit’s faster growth rate and potential catalysts. Oppenheimer also raised its target from $215, noting higher estimates and the potential benefits from artificial intelligence licensing. Needham echoed this sentiment, attributing the increase to generative artificial intelligence and improved labor productivity. Jefferies joined in by raising its target from $230, highlighting the sustainability of Reddit’s revenue growth and stabilization in daily active user trends.
Furthermore, Reddit is in early discussions with Google to establish a content-sharing agreement, aiming to enhance integration with Google’s AI products. Executives involved in the talks have indicated that Reddit’s data is becoming increasingly valuable in search results and generative AI training. These developments reflect Reddit’s strategic positioning in the evolving digital landscape.
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