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Investing.com - Citizens JMP raised its price target on Reddit (NYSE:RDDT) to $225.00 from $180.00 while maintaining a Market Outperform rating, following the company’s second-quarter earnings report. With a current market capitalization of $29.63 billion and trading at high valuation multiples, InvestingPro analysis suggests the stock is trading above its Fair Value.
Reddit reported revenue and EBITDA that exceeded the high end of guidance by $70 million (16%) and $37 million (28%) respectively. Advertising revenue growth accelerated to 84% year-over-year during the quarter, building on the company’s impressive 90.82% gross profit margin. InvestingPro data reveals strong financial health metrics, with 18 additional key insights available to subscribers.
The company provided guidance for 55% year-over-year revenue growth for the third quarter of 2025, building on a 68% year-over-year growth comparison from the previous year.
While user growth has slowed, daily active user metrics have stabilized, with Reddit exiting the quarter with more users than it averaged in Q2 2025. The company added daily active users in both U.S. and international markets in July.
Citizens JMP cited "incredible momentum" in Reddit’s core advertising product and noted that Reddit Answers, the company’s search product, is scheduled for broader testing in the second half of 2025.
In other recent news, Reddit Inc. reported impressive financial results for the second quarter of 2025, with earnings per share (EPS) reaching $0.45, significantly exceeding the forecasted $0.19. This marked a surprise of 136.84%, showcasing the company’s strong performance. Revenue for the quarter was $500 million, driven by robust advertising growth. Additionally, Reddit provided Q3 guidance that surpassed market expectations, further bolstering investor confidence.
Goldman Sachs responded to these developments by raising its price target for Reddit from $152 to $212, while maintaining a Neutral rating on the stock. The firm noted Reddit’s strong revenue growth momentum and user growth trends, which improved by the end of the quarter. Despite some volatility in user growth, the company’s focus on increasing logged-in users proved effective. These recent developments highlight Reddit’s ongoing efforts to strengthen its financial performance and market position.
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