Doug Anmuth, senior analyst at JPMorgan, believes that Reddit Inc.
Anmuth believes that Reddit’s shares, which have risen by 40% in the past four months, will continue to rise with a positive quarterly report posted this week.
The NYSE listed firm made 13 cents (adjusted), which was well over the forecast of 2 cents.
RDT’s Q1 revenue of $392m also exceeded Street expectations by approximately $22 million.
Reddit’s shares could rise to $145 by 2025
JPMorgan recommends owning Reddit stock at current levels as the San Francisco-headquartered firm continues to grow its daily active users at an accelerated pace.
Doug Anmuth raised his price target for RDT to $145 because he was confident that Reddit’s fast-growing audience would attract significant advertising dollars in 2025.
In a recent research note, he said that Reddit “continues to perform well” and is capturing a large share of the advertiser’s budget.
Reddit’s shares were down 45% from their high for the year to date at the time this article was written.
RDT has a strong position to increase its revenue and profit
The analyst at JPMorgan believes that shares in the social media firm could continue to rise as the management introduces new features, such as AI-enabled Reddit Answers.
Overall, San Francisco’s firm has a strong position to grow its revenue and profit, which could unlock a significant increase in the share price of the company in the coming months.
Doug Anmuth’s revised upwardly price target for RDT translates into a 20% increase from the current level.
The social news platform currently does not pay dividends and, as such, is not suitable for income investors to pick in 2025.
Reddit’s fiscal Q2 guidance is optimistic
Reddit’s optimistic guidance on the current quarter, given earlier in the week at a moment when the tariffs, and macro-uncertainty that goes with them, are making others cautious, could be encouraging to investors.
RDT’s revenue is expected to be in the $410-$430 million range in Q2, which is significantly higher than the analysts’ forecast of $396 million.
Steve Huffman’s letter to shareholders stated that Reddit was well-positioned for the macro-uncertainty. He added, “We have grown in challenging times in the past – in times of uncertainty people still need information and connection.”
Reddit shares are currently rated “overweight” by other Wall Street firms, confirming JPM’s rating.
Will RDDT share prices rise further by 2025, as this post on Reddit attracts ad dollar? This post may change as new information becomes available
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