Reddit (RDDT) PT Raised to $205 at Raymond James

Raymond James analyst Josh Beck raised the price target on Reddit (NYSE: RDDT) to $205.00 (from $200.00) while maintaining a Strong Buy rating.

The analyst comments "The Call: We build a ‘tree analysis’ to frame up daily active users (DAUs) segments between direct vs. Google traffic (split between navigational vs. other query types). We also examine key DAU swing factors including AI Overviews (Google AIOs), Feed and AI Chatbots. Our conclusions are somewhat mixed, as RJ remains below the Street on U.S. DAUs as we have limited visibility into AIO headwinds easing (we assume related to content layout and click-through-rate (CTR)); however, we are optimistic that improvements to the underlying Feed recommendation systems (RecSys) can improve weekly active user (WAU) to DAU conversion and see AI Chatbot traffic as an eventual tailwind, which could improve the currently cautious DAU narrative. We reiterate our Strong Buy recommendation on a positive risk/reward, as the current valuation of 13x EV/EBITDA is only 2-turns above ad peers despite a 1.5x growth rate."

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