Reddit shares rise 7%, set record as Raymond James raises price target
Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor as he sets the stock price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City.
Spencer Platt | Getty Images News | Getty Images
Reddit Shares rose more than 7 percent on Tuesday after analysts at Raymond James raised their price target and issued a “strong buy” rating for the social media platform.
The company’s shares hit $191 in midday trading, up from a Jan. 6 high of $182. Reddit shares topped $100 for the first time since the company reported third-quarter financial results that beat Wall Street expectations in late October.
Reddit analysts said in a note on Tuesday that they would raise Reddit’s price target to $200 from $150, largely due to their ‘conviction’ that Reddit could expand its business globally.
Reddit’s chief operating officer Jane Wong told CNBC in November that the company plans to attract more users outside its core US market. Reddit’s third-quarter sales rose 68 percent year-over-year to $348.4 million.
Reddit’s increased use of artificial intelligence to automatically translate the site’s content into languages such as Portuguese, French, Spanish, Filipino and German “should help Reddit improve its local search rankings and deliver sustained high growth,” wrote analysts at Raymond James.
The company’s AI-based efforts are key to global expansion, Wong told CNBC in November. Some of Reddit’s fastest-growing regions in terms of users include the United Kingdom, the Philippines, India and Brazil, she said.
“This definitely points to our many future user opportunities outside of the US and local languages,” Wong said. “Every language is an opportunity for another Reddit.”
Analysts at Raymond James also cited the SimilarWeb research firm as saying the company remains one of the top five most searched websites. Reddit’s “authentic and unique medium (community system) content” will help the company stay on top of search results, ultimately driving more Reddit users to create accounts, the analysts wrote.
As a result of last year’s internal website updates and previous Google search algorithm changes, Reddit favored “authentic” content by users who logged in rather than by users who frequented the platform. He earns more money.
In the “Risks” section, analysts at Raymond James mentioned that Reddit could suffer from “Google Search Algo Updates” that would push the site lower in search results and turn those logged-out users into financially attractive entry prices. Companions.
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