Bank of America just raised its EUR/USD forecast
On Thursday, Seaport Global Securities began coverage of Reddit (NYSE:RDDT) with a Neutral rating, reflecting a view that the stock is currently fairly valued. The firm’s analysts pointed to Reddit’s valuation at 18.5 times its projected 2026 enterprise value to revenue as a basis for this assessment. With a market capitalization of $38.83 billion and trading near its 52-week high of $221.18, InvestingPro analysis suggests the stock is slightly overvalued at current levels.
In a statement released Thursday, Seaport Global Securities acknowledged Reddit’s position as one of the internet’s most frequented platforms, with a user base exceeding 365 million weekly visitors. The firm anticipates that Reddit will maintain its momentum in growing its user base, especially at the international level. This growth potential is reflected in the company’s impressive revenue growth of 48.7% over the last twelve months. Despite the positive outlook on user growth, the analysts also noted the potential challenges ahead in 2025, particularly concerning the engagement of logged-out users.
The analysts at Seaport Global Securities are optimistic about Reddit’s long-term fundamentals. They believe that Reddit presents a valuable opportunity for advertisers, with significant potential to increase monetization in both the U.S. and international markets. This potential for revenue growth is a key factor in their positive view of the company’s underlying business prospects. InvestingPro data reveals an impressive gross profit margin of 89.25%, suggesting strong monetization efficiency. For deeper insights into Reddit’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
While the firm is neutral on the stock’s current valuation, they underscore the strength of Reddit’s revenue performance and the possibility that it could surpass consensus estimates. The analysts’ neutral stance is based on their belief that the market has already accounted for these positive factors in the current share price.
Seaport Global Securities’ initiation of coverage on Reddit with a Neutral rating reflects a balanced perspective on the company’s market valuation and its potential for future growth and monetization.
In other recent news, Reddit has been the focus of several recent developments. JMP Securities maintained a bullish stance on Reddit, reiterating a Market Outperform rating and a $190.00 price target. The firm highlighted Reddit’s significant influence on consumer behavior and its potential in the search domain. Additionally, Reddit’s anticipated paid search features, expected to roll out in the second half of 2025 or the first half of 2026, were seen as a positive development for the platform’s revenue prospects.
On a similar note, Piper Sandler recognized a new feature on Reddit that streamlines ad campaign imports from Meta Platforms Inc (NASDAQ:META).’s ads manager. This development, according to the firm, could attract more advertisers to Reddit’s platform. In another update, JMP Securities raised its price target for Reddit from $160 to $190, citing ongoing engagement momentum, maturation of Reddit’s advertising products, and growing advertiser awareness.
In an effort to attract advertisers, Reddit and Snap offered discounts for those who increase their ad spend on these platforms. Reddit is offering a 10% return in ad credits for brands that spend between $150,000 and $1 million, and a 15% return for those who spend more than $1 million. These recent developments indicate Reddit’s strategic measures to enhance its competitiveness and revenue streams.
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