Core Viewpoint - Raymond James raised its price target on Reddit (NYSE: RDDT) to $250 from $225 while maintaining a Strong Buy rating, resulting in a more than 6% increase in shares intra-day on Monday [1] Group 1: Revenue and Advertising Metrics - The updated analysis indicates a bull case for U.S. logged-in ARPU approaching $100, driven by higher ad load, stronger CPMs, and on-platform AI search that could increase query volume [1] - Agency checks revealed e-commerce campaigns with targeting clearing above $6 CPM, showing a triple-digit year-over-year increase, consistent with revised internal metrics suggesting about $4 CPM for generic campaigns compared to $2 previously [2] - Raymond James benchmarked Reddit's U.S. revenue per thousand impressions (RPM) at roughly $2 currently, with a bull case near $6, while the peer average is around $5 across platforms like Google, Meta, Pinterest, Snap, and Nextdoor [2] Group 2: Advertising Load and AI Search Potential - The model assumes home-feed ad load will rise from 13% (1-in-8) to 17% (1-in-7), which is still below many peers that could flex to 25%-50% [3] - For AI search, the firm projected queries increasing from 1.5 billion per month to 4 billion, with a 25% ad load, sub-1% click-through rate, and $1 cost-per-click, implying a roughly $350 million incremental revenue opportunity for currently unmonetized formats [3] Group 3: Market Sentiment - Analysts described the tactical setup as neutral into the print but argued that the risk/reward remains attractive at current levels [4]
Raymond James Lifts Reddit Target to $250, Shares Gain 6%