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Investing.com - Bernstein SocGen Group raised its price target on Reddit (NYSE:RDDT) to $150.00 from $130.00 while maintaining a Market Perform rating. According to InvestingPro data, analyst targets for Reddit currently range from $75 to $220, with the stock trading near $146.29.
The firm cited renewed focus on user growth as a key driver for the stock, noting positive reactions to news of accelerating user growth following earlier lukewarm earnings commentary.
Bernstein observed mixed signals in app download data, with global improvements contrasting with year-over-year declines in U.S. downloads, while recent Google (NASDAQ:GOOGL) algorithm changes in late June added uncertainty to third-quarter daily active user projections.
The firm’s channel checks indicate impressive advertising growth as Reddit diversifies its advertiser base and shifts toward direct response advertising, suggesting a pathway to sustainable growth despite potential volatility from user growth fluctuations. InvestingPro data shows Reddit maintains impressive gross profit margins of 90.82% and achieved 64.12% revenue growth in the last twelve months. For deeper insights into Reddit’s financial health and 15+ additional ProTips, consider exploring InvestingPro’s comprehensive analysis.
Bernstein’s new price target is based on a revised valuation using a combination of a 12x EV/Sales multiple for 2026 estimates (up from 9x) and a discounted cash flow analysis with a 10% weighted average cost of capital and 3% terminal growth rate. Based on InvestingPro’s Fair Value analysis, Reddit currently appears overvalued, trading at significant premiums across multiple valuation metrics.
In other recent news, Reddit is preparing to release its second-quarter earnings, with Citi maintaining a Buy rating and a $163 price target, anticipating results that exceed consensus expectations. Wells Fargo (NYSE:WFC) has increased its revenue estimate for Reddit’s Q2 2025 to $427 million, marking a 52% growth and aligning with the high end of the company’s guidance. The firm also raised its price target to $118, citing stabilizing advertising trends. Meanwhile, Baird has raised its price target to $151 from $120, maintaining a Neutral rating, due to improved site traffic following earlier Google-related issues.
Citizens JMP and JMP Securities both reiterated a Market Outperform rating with a $180 price target. Citizens JMP highlighted stabilized user growth from enhanced visibility in Google search and AI features, suggesting potential upside in estimates. Despite noting a slowdown in user engagement growth, JMP Securities remains optimistic about the stock’s performance. These developments indicate a mix of optimism and caution among analysts, reflecting varied expectations for Reddit’s future performance.
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