Social media company Reddit (RDDT) remains a “long-term opportunity” for investors and is worthy of an upgrade, according to five-star rated analyst Aaron Kessler.
The leading technology analyst, who works for Seaport Research, upgraded RDDT stock to a Buy rating from neutral previously, and lifted his price target on the shares to $165, which is about 45% higher than where they currently trade.
“We continue to expect solid long-term user growth and meaningful revenue/monetization growth,” wrote Kessler in a note to clients. His upgrade comes after Reddit reported solid first-quarter financial results on May 1, with profits and sales each beating Wall Street estimates.
Google Issue
Despite the solid print, RDDT stock declined 4% on May 2 after management said they are seeing signs of slowing user growth in the current quarter due to Google parent company Alphabet (GOOGL) making changes to its search functions.
“While near-term user growth is likely to decelerate, we remain positive on long-term user growth,” wrote Kessler in his upgrade of Reddit’s stock. Other Wall Street analysts also remain optimistic about RDDT. Truist Financial (TFC) analyst Youssef Squali reiterated a Buy rating on the stock with a $160 price target after Reddit’s latest earnings.
RDDT stock has decreased 28% this year.
Is RDDT Stock a Buy?
The stock of Reddit has a consensus Moderate Buy rating among 22 Wall Street analysts. That rating is based on 14 Buy, seven Hold, and one Sell recommendations issued in the past three months. The average RDDT price target of $157.86 implies 33.75% upside from current levels.
