Reddit's (RDDT) advancements in automation, ad formats, and recommendation models are expected to drive durable growth, Morgan Stanley said in a Friday research report.
The company has a long runway for growth across active advertisers and higher penetration within current advertisers. Momentum across new ad formats is also expected to drive long-term growth, analysts wrote.
Morgan Stanley now expects a sequential increase of around 5 million users to 121 million in Q4, as the company works to improve user retention, according to the note.
The brokerage noted that Reddit's pipeline of ad initiatives will drive continued growth in 2026 and 2027. It also raised its revenue forecast for these two years by 3% and 4%, respectively.
Morgan Stanley said it reiterated its overweight rating on the stock and raised its price target to $250 per share from $230 earlier.
Price: 224.57, Change: +30.15, Percent Change: +15.51
精彩评论