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Investing.com - Citizens maintained its Market Outperform rating and $300 price target on Reddit (NYSE:RDDT) on Thursday, citing strong advertising momentum and upcoming product launches. According to InvestingPro data, Reddit boasts impressive gross profit margins of 91% and has achieved nearly 70% revenue growth in the last twelve months.
The financial services firm noted that Reddit last closed at $200.76, which represents a valuation of 14.6 times Citizens’ estimated 2026 revenue for the social media platform.
Citizens’ unchanged $300 price target is based on approximately 22 times the company’s projected 2026 revenue, reflecting a premium to comparable companies that the firm justifies by Reddit’s faster growth rate.
The firm highlighted several upcoming product initiatives expected to drive growth, including the expansion of Reddit Shopping, the general availability launch of Reddit Max, and plans to make Reddit Answers the default search experience on the platform.
Citizens expressed confidence that Reddit will "materially outperform expectations near term" based on current advertising momentum and these forthcoming product launches.
In other recent news, Reddit has been the focus of several analyst updates. Truist Securities raised its price target for Reddit to $260 from $225, maintaining a Buy rating. The firm pointed to several catalysts expected to drive the stock higher in the coming months, including anticipated strong third-quarter 2025 results. Meanwhile, Citizens Financial has consistently maintained its Market Outperform rating with a $300 price target. This decision was supported by data showing Reddit’s advertising effectiveness, particularly for products with long-consideration purchase paths. Additionally, Citizens noted the potential for Reddit to improve its revenue through its advertising tools, comparing its monetization capabilities to those of Meta. Despite concerns over declining user metrics, the emphasis on advertising potential has been a key focus for analysts. These developments reflect a continued interest in Reddit’s future performance in the advertising sector.
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