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Reddit Shares Surge to Record High After Raymond James Raises Price Target to $200
Reddit shares closed up more than 7% to a record high on Tuesday after Raymond James analysts raised their price target to $200 from $150 and reiterated their “strong buy” rating for the social media platform. The company’s shares reached $191 during midday trading, topping a previous high of $182 on January 6.
The Raymond James analysts cited their “conviction” that Reddit can expand its business internationally as the main reason for the price target increase. The company is planning to attract more users outside its core US market as it looks to expand its advertising business.
Reddit’s third-quarter sales, which are predominantly online advertising, rose 68% year-over-year to $348.4 million. The company’s use of artificial intelligence to automatically translate its site text to different languages, including Portuguese, French, Spanish, Philippines, and German, is expected to help improve local search rankings and provide durable hypergrowth.
Reddit’s fastest-growing regions in terms of users include the UK, the Philippines, India, and Brazil, and the company’s AI-translation efforts are key to its international expansion. The company is also one of the top five most searched websites, according to research firm SimilarWeb, and its “authentic and uniquely moderated” content will help it stay on top of search results, ultimately resulting in more Reddit users creating accounts.