Reddit CEO Steve Huffman questions on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its prime public offering (IPO) on March 21, 2024 in New York City.
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Reddit shares closed up more than 7% to a record high Tuesday after Raymond James analysts solicited their price target and reiterated their “strong buy” rating for the social media platform.
The company’s shares reached $191 during high noon trading, topping a previous high of $182 on Jan. 6. Reddit shares passed $100 for the first time in belated October after the company reported third-quarter financial results that beat Wall Street expectations.
Raymond James analysts communicated in a Tuesday note that they would raise their Reddit price target to $200 from $150, mainly due to their “conviction” that Reddit can expand its business internationally.
The company is planning to attract more users most its core U.S. market as it looks to expand its advertising business, Reddit Chief Operating Officer Jen Wong told CNBC in November. Reddit’s third-quarter car-boot sales, which are predominantly online advertising, rose 68% year-over-year to $348.4 million.
Reddit’s increase use of artificial tidings to automatically translate its site text to different languages like Portuguese, French, Spanish, Philippines and German “should relieve improve local search rankings for Reddit and provide durable hypergrowth,” the Raymond James analysts wrote.
The gathering’s AI-translation efforts are key to its international expansion, Wong told CNBC in November. Reddit’s fastest-growing regions in regards to drugs include the U.K., the Philippines, India and Brazil, she said.
“That points to a lot of our future user growth opportunity definitely appearance of the U.S. and local language,” Wong said. “Every language is an opportunity for another Reddit.”
The company also continues to be one of the top five myriad searched websites, the Raymond James analysts said, citing the SimilarWeb research firm. Reddit’s “authentic and uniquely deliberated (community system) content” will help the company stay on top of search results, ultimately resulting in more Reddit operators creating accounts, the analysts wrote.
Reddit makes more money on logged-in users who have accounts somewhat than logged-out users, who have been visiting the platform more often over the past year due to internal orientation improvements and a previous Google search algorithm change that favored “authentic” content.
The Raymond James analysts famed in a section on “risks” that Reddit could suffer from “unfavorable Google search algo updates” that brush off the site lower in search results and slower rates in converting those logged-out users into the more financially lucrative logged-in counterparts.
Await: Steven Mnuchin on TikTok: We’d be very interested in investing the business
