Reddit stock price target raised to $300 from $215 at Oppenheimer

Investing.com - Oppenheimer raised its price target on Reddit (NYSE:RDDT) to $300 from $215 on Monday, while maintaining an Outperform rating on the social media platform’s stock. The stock, currently trading near its 52-week high of $266.64, has delivered an impressive 345% return over the past year. According to InvestingPro analysis, Reddit appears overvalued at current levels, with 20+ additional insights available to subscribers.

The price target increase reflects higher estimates and a higher multiple of 35 times 2027 estimated EBITDA, or 28 times when accounting for potential artificial intelligence licensing upside, according to Oppenheimer.

Similarweb data regression analysis suggests third-quarter U.S. logged-in daily active users (DAU) could be 0.8 million above Oppenheimer’s estimate and 1.1 million above consensus, the firm noted. This metric is considered a primary driver of Reddit’s revenue.

Quarter-to-date ad portal visits have accelerated on a two-year basis to 47% growth, compared to 30% in the second quarter and 19% in the first quarter. This aligns with third-party commentary indicating improved return on investment driving higher advertising spending.

Oppenheimer increased its fiscal year 2026 and 2027 estimates for logged-in daily active users, revenue, and EBITDA, with 2027 projections now 3%, 12%, and 23% higher, respectively. The firm also sees potential upside from large language model (LLM) revenue, citing Anthropic’s recent copyright settlement, though this is not incorporated into current models.

In other recent news, Reddit has reported strong second-quarter results, surpassing expectations with notable revenue growth and an increase in global daily active users by 21% year-over-year to 110.4 million. The company also provided positive guidance for the third quarter, highlighting robust performance across both brand and performance advertising formats. Following these results, Deutsche Bank raised its price target for Reddit to $205, maintaining a Buy rating.

Additionally, Morgan Stanley increased its price target to $230, citing better-than-expected user metrics, as U.S. users remained stable, contrary to projections of a decline. Needham and Jefferies both raised their price targets to $300, emphasizing the benefits of generative artificial intelligence and sustained revenue growth, respectively. Needham highlighted improvements in labor productivity, while Jefferies pointed to a stabilization in daily active user trends.

Meanwhile, RBC Capital reiterated its Sector Perform rating with a price target of $210, focusing on ad load analysis and future expansion opportunities. These developments reflect a positive outlook from multiple investment firms, driven by Reddit’s recent performance and growth prospects.

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