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Takeaways
- Reddit shares surged during premarket trading on Friday, after the social media platform reported better-than expected results and outlook.
- First-quarter revenue and profit topped estimates, and its projected current-quarter revenue came in above analysts' estimates.
- Analysts at JPMorgan and Citi raised their price targets and said that they expect revenue to continue to grow.
Reddit shares (RDDT), a social media company, surged in premarket trade on Friday. The day before, the company had reported better than expected first-quarter earnings and a positive outlook.
The company expects revenue in the second quarter of $410 to $430 millions, which is higher than the Visible Alpha consensus of $394 million. The shares were up over 4% at about $124 30 minutes before the opening bell. However, they entered Friday with a value of less than a quarter.
JPMorgan analysts after the report kept a "neutral" rating on Reddit stock while lifting their price target to $145 from $110. The analysts said that Reddit "continues to execute well & capture share of advertiser budgets," and said they expect the platform to continue growing revenue and profitability.
The new price goal brings JPMorgan’s analysts closer to Visible Alpha’s consensus of $153.21. The stock has 10 "buy" ratings, along with four "hold" and one "sell" ratings.
Citi analysts raised their price target from $150 to $158 following the report. They also confirmed their “buy” rating. The analysts stated that they “believe there is a number of potential catalysts to drive continued revenue and user growth for Reddit” including the wider roll-out of new features such as artificial intelligence powered Reddit Answers.
