Needham & Firm analysts raised the worth goal for Reddit (RDDT) to $75 from $63 per share in a notice Tuesday, sustaining a Purchase score on the social media platform’s inventory.
The funding agency stated RDDT’s core promoting fundamentals and person provides are exceeding their prior estimates, and its working prices are rising extra slowly than prior estimates.
“Our projected knowledge licensing revs (at 85% margins) have practically doubled since our initiation report, due to its new 3-year take care of OpenAI, which ought to add to RDDT’s rev and FCF starting in 3Q24,” writes Needham.
The agency expects extra data-licensing offers to be introduced within the second half of this yr and 2025.
Total, Needham stated components corresponding to Reddit’s GenAI income stream, person development, engagement, advert income development, increasing margins, and worldwide development, make up its bull case for the inventory.
