RBC Capital on Reddit (RDDT): 'Bulls and bears get what they want'

RBC Capital analyst Brad Erickson reiterated a Sector Perform rating and $245.00 price target on Reddit (NYSE: RDDT)

The analyst comments "RDDT had another strong print with significant revenue & guidance upside partly offset by U.S. DAU deceleration. Most positively, 1) September DAUs accelerated though intra-qtr was not given, 2) The ad platform, ad load, advertisers and user trends all screen under-baked/ still evolving, likely pointing to significant further revenue growth & upside potential, 3) Google renewal not until next year but discussions remain encouraging with a heavy focus on driving more engagement vs. legacy 'data for dollars' agreements and 4) engagement on key new surfaces like Search & Answers continues trending positively. Less positively, logged in and logged out U.S. DAUs both decelerated to single digits which will reinforce if not raise bears' conviction in the Google/GenAI bear case, particularly after GOOGL's strong AIO/AI Mode adoption commentary last night. The beats remain plenty big to warrant a higher stock, in our view, while we still look for a clearing event around the Google renewal & associated secular issue. Raising estimates, target remains $245, remain Sector Perform."

For an analyst ratings summary and ratings history on Reddit click here. For more ratings news on Reddit click here.

Shares of Reddit closed at $194.42 yesterday.

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