In a report released today, John Colantuoni from Jefferies maintained a Buy rating on Reddit Inc Class A (RDDT – Research Report), with a price target of $225.00.
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John Colantuoni’s rating is based on a combination of factors that highlight Reddit Inc Class A’s potential for continued revenue growth, particularly through its advertising segment. The company has shown a significant acceleration in advertising revenue, with a notable increase in Advertising Revenue per Logged-in User (ARPU), which has outperformed expectations. This growth is supported by the introduction of new advertising products and the expansion into additional languages, which have bolstered international user engagement.
Despite a recent slowdown in US user growth, attributed to changes in Google’s algorithm, Reddit’s monetization strategy remains promising. The company is expected to maintain its revenue growth trajectory through continued innovations in advertising formats and targeting, as well as by diversifying its advertiser base. Additionally, Reddit’s strong gross margins and cost discipline contribute to a positive outlook, supporting the Buy rating even amidst uncertainties in user growth trends.
According to TipRanks, Colantuoni is a 5-star analyst with an average return of 11.7% and a 64.64% success rate. Colantuoni covers the Consumer Cyclical sector, focusing on stocks such as eBay, Expedia, and Etsy.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $210.00 price target.