Evercore ISI analyst Mark Mahaney initiated coverage on Reddit, Inc. (NYSE: RDDT) stock on January 12. The coverage began with an Outperform rating and a price target of $320.
Analysts at the firm stated that Reddit has more room to turn its user engagement into revenue. They anticipate a three-year revenue compound annual growth rate of 30% to 40%. This growth is expected to be driven by the company's development of new features and more advanced advertising products.
"Our Stock Call: We are initiating coverage of Reddit (RDDT) with an Outperform rating & a $320 price target (30% upside), based on 35x '27E EBITDA of $1.8B," said Mark Mahaney. "We view valuation (39x '26 EBITDA) as very robust but reasonable, given our outlook for a 3-year Revenue CAGR of 30–40% & EBITDA CAGR of 40–50%, one of the strongest growth profiles in our sector. We see upside to Street ests — we are 4% above Street in '27 on Revenue & EBITDA."
The analysts noted that RDDT has already been performing well. However, they pointed out there is still significant opportunity for it to increase its average revenue per user. Factors such as industry comparisons, recent product launches, and feedback from advertising checks are likely to lead to such an increase.
Reddit, Inc. is a social media platform that uses AI to strengthen search functionality and improve user engagement.