Bank of America Raises Reddit Price Target Ahead of Earnings Report

Key Takeaways

• Bank of America raised its price target for Reddit Monday, a day before the social media company’s first earnings report since going public.
• BofA boosted its price target for Reddit to $50 per share from $46.
• The analysts suggested Reddit’s revenue could exceed estimates, and they raised their longer-term outlook for the firm.

Reddit (RDDT) shares saw a slight increase on Monday as Bank of America (BAC) analysts raised their price target on the stock in anticipation of potential upside following the social media company’s first-quarter earnings report on Tuesday, marking its initial report since its IPO.

Price Target Lifted to $50 From $46

Bank of America increased its price target for Reddit to $50 per share from the previous $46, while maintaining a “neutral” rating for the company’s stock. By 3 p.m. ET on Monday, the stock had climbed to $47.56, representing a nearly 2% gain.

The analysts at BofA expressed optimism that Reddit could surpass the bank’s revenue estimate of $212 million for the quarter, which reflects a 29% increase compared to the same period last year. Additionally, they projected ad revenue to reach $199 million, marking a 21% year-over-year growth.

Expecting Jump in Daily Active Users to 77 Million

Bank of America also forecasted a 28% year-over-year increase in Daily Active Users (DAU) to reach 77 million. They highlighted data indicating that Reddit’s initiatives focused on relevancy and speed have been driving heightened user activity.

In response to these positive indicators, BofA raised its projections for earnings before interest, taxes, depreciation, and amortization (EBITDA) and revenue for the current quarter to account for anticipated user growth and improved monetization. The analysts also revised their EBITDA and revenue expectations for 2024 and 2025 upwards.

Since going public on March 21, Reddit’s stock has experienced fluctuations, reaching an all-time high shortly after its debut before declining to an all-time closing low in April. Despite subsequent rallies, the stock has yet to surpass its closing price of $50.44 on its first day of trading.

It is worth noting that the information provided in this article is based on data available at the time of writing. For the latest updates and developments regarding Reddit’s performance and stock price, investors are advised to consult reliable financial sources.

For more details on this topic, you can read the original article on Investopedia [here](https://www.investopedia.com/reddit-price-target-raised-by-bofa-analysts-ahead-of-earnings-report-tuesday-8643933).

As Reddit prepares to release its first-quarter earnings report following its IPO, investors are closely monitoring the company’s performance and growth trajectory. With Bank of America raising its price target and expressing optimism about Reddit’s revenue potential, the social media platform’s upcoming financial results are eagerly awaited by market participants.