Loop Capital Upgrades Reddit to Buy, Shares Gain…
.August 1, 2024 09:45 AM
Reddit (NYSE:RDDT) shares surged over 4% pre-market following Loop Capital’s upgrade to a Buy from Hold. The social media platform’s stock had dropped nearly 20% since July 15, now trading at 7.8 times the firm’s 2025 estimated revenue. Loop Capital maintains a price target of $75 per share, projecting a 23% upside potential for Reddit.
Despite an upcoming lockup expiration on August 9, Loop Capital remains bullish on Reddit’s current valuation. They believe Reddit has the potential to surpass estimates in users, revenue, and adjusted EBITDA, despite expected selling pressure.
Loop Capital anticipates that a 1% increase in advertising ARPU and data licensing, including the OpenAI deal, will drive Q2 revenue above guidance. Looking forward, they forecast Reddit’s 2024 revenue to exceed Street consensus, supporting their positive outlook on the stock.