Core Viewpoint - Reddit, Inc. (NYSE:RDDT) is identified as a promising AI stock with significant growth potential, supported by a recent Outperform rating and a price target of $320 from Evercore ISI analyst Mark Mahaney [1][3]. Revenue Growth Potential - Analysts project a three-year revenue compound annual growth rate (CAGR) of 30%-40%, driven by the introduction of new features and advanced advertising products, positioning Reddit among the strongest growth profiles in the sector [2]. - The company is expected to achieve an EBITDA CAGR of 40%-50%, indicating robust financial performance and growth potential [3]. Valuation Insights - The stock is valued at 35 times the estimated EBITDA of $1.8 billion for 2027, with a current valuation of 39 times the 2026 EBITDA, which is considered robust yet reasonable given the growth outlook [3]. - Analysts believe there is upside potential to street estimates, being 4% above the consensus for revenue and EBITDA in 2027 [3]. User Engagement and Revenue Opportunities - Reddit has been performing well, but there remains significant opportunity to increase its average revenue per user, driven by industry comparisons, recent product launches, and positive feedback from advertising checks [3]. AI Integration - Reddit leverages AI to enhance search functionality and improve user engagement, indicating a strategic focus on technology to drive growth [4].
Why Evercore ISI Is Bullish on Reddit’s (RDDT) Monetization Story