Reddit Stock Gets New Analyst Buy Rating On 'Compelling Opportunity'

• Analysts believe Reddit remains 'incredibly under-monetized' relative to peers, with growth opportunities from advertising, data licensing to AI companies like Google and OpenAI, and broader user adoption
• Reddit stock climbed back above its 50-day exponential moving average last week for the first time since January, though it remains well below its 200-day moving average
• The stock holds an IBD Composite Rating of 63 out of 99, below the 90+ threshold typically associated with best-performing growth stocks

Reddit Stock Receives New Buy Rating Amid Market Downturn

Key Development:

D.A. Davidson initiated coverage of Reddit (RDDT) with a buy rating and a $200 price target on Tuesday, calling the current valuation a "compelling opportunity" despite the stock's challenging 2025 performance.

Stock Performance:

• Reddit is down 28% year-to-date and trading more than 40% below its late-2024 record high of $282.95
• The stock rallied over 600% in the 18 months following its March 2024 IPO
• Shares climbed nearly 1% to $167.91 in premarket trading Tuesday
• Stock recently reclaimed its 50-day exponential moving average for the first time since January, though it remains below its 200-day moving average

Investment Thesis:

Analyst Wyatt Swanson argues Reddit is "incredibly under-monetized relative to peers" and well-positioned as a "human-first social platform." Key growth drivers include:

• Expanding advertising business within its forum-focused platform
• Data licensing agreements with large language model developers including Google and OpenAI
• Potential for more favorable contract renewals with LLM providers
• Broader advertiser base and improved operating leverage

Upcoming Catalysts:

• Q1 2025 earnings report scheduled for April 30
• Broader launch of an unspecified product
• Potential settlement of ongoing litigation

Technical Position:

Reddit holds an IBD Composite Rating of 63 out of 99, below the 90+ threshold typically associated with top growth stocks.