Reddit (RDDT) PT Raised to $110 at JPMorgan
JPMorgan analyst Doug Anmuth raised the price target on Reddit (NYSE: RDDT) to $110.00 (from $77.00) while maintaining a Neutral rating.
The analyst comments "RDDT shares traded up +25% post-close as 3Q results & 4Q guidance across Revenue & Adj. EBITDA exceeded JPMe, consensus, & investor expectations. RDDT’s 4Q guide assumes stable macro ad trends & we believe Reddit is benefitting from structural improvements as the company executes across its strategy across product, users, & monetization. RDDT continues to drive DAUq growth across US & int’l markets, with DAUq averaging 97.2M in 3Q but reaching 100M+ on select days during the quarter. Reddit is rolling out Machine translation across 30+ markets through 4Q & 2025, which should support future DAUq growth. Ad revenue growth accelerated to +56% Y/Y in 3Q (vs. +41% Y/Y in 2Q) driven by full-funnel strength & RDDT continues to make progress with lower-mid funnel initiatives (~67% of roadmap). Performance ads drove more than half of 3Q growth & accounted for 60% of total ad revenue while scaled mid-market/SMBs grew +80% Y/Y (vs. 50%+ Y/Y in 2Q). Strong revenue growth & increased cost leverage supported significant profitability gains, with Adj. EBITDA margins reaching 27.0% in 3Q (~72% incremental margin) & RDDT achieved positive GAAP Operating & Net Income for the first quarter since 4Q23. We’re encouraged by RDDT’s growing DAUq scale, strong revenue growth, & improved profitability, & we look for continued execution across advertiser scale, new ad formats/tech (Search, Conversation Ads, Shopping Ads), & progress toward mgmt’s 40% L-T Adj. EBITDA margin target. We raise our 4Q Revenue & Adj. EBITDA estimates slightly above mgmt’s guidance. Our 2025 & 2026 Revenue estimates increase 7-9% each & our Adj. EBITDA estimates increase 22-23%. We remain Neutral and increase our December 2025 PT to $110 based on ~39.5x 2026E FCF of $533M & ~37.5x 2026E Adj. EBITDA of $559M."