Reddit Sees Surge in Growth, Goldman Sachs Ups Price Target to $140
With its growing user base and increasing revenue, Reddit is poised to remain a major player in the digital advertising and creator economy spaces, making it an important platform to watch in the coming months and years.
Goldman Sachs analyst Eric Sheridan has increased the price target for Reddit's stock to $140 from $124, citing the company's strong Q1 2025 earnings report, which showed a 61.7% revenue growth and a market capitalization of $21.5 billion.
The Q1 2025 earnings report revealed significant growth in traffic and user engagement, with total Daily Active Uniques (DAUq) rising 31% year-over-year to 108.1 million. Weekly Active Uniques reached 401.3 million globally, also up 31%. International users grew 41%, outpacing the 21% growth in the US. The report also highlighted a significant increase in revenue and monetization, with total revenue increasing 61% to $392.4 million and advertising revenue reaching $358.6 million.
Sheridan noted robust revenue growth, healthy user growth trends, and strong operating leverage, but also pointed out a slowdown in user growth in April QTD. Despite this, he remains confident in Reddit's alignment with long-term secular growth trends, including digital advertising, AI, and the creator economy. However, he sees a balanced risk/reward scenario at current stock levels.
The increased price target and strong earnings report make Reddit a relevant platform for digital marketers and a destination for referral traffic. As the company continues to expand its reach and grow its user base, it will be interesting to see how it navigates the evolving digital landscape and maintains its momentum in the coming quarters.