Reddit (RDDT) is "well positioned" to keep expanding its presence in the roughly $250 billion digital advertising market, Oppenheimer said in a report Friday.

The social media platform reported Q1 revenue growth of 61% year-over-year, coming in 6% above Wall Street expectations. Despite a slower April for daily active users, Reddit guided for Q2 revenue to increase 49% year-over-year, 7% above consensus estimates, the report said.

Reddit's ad business showed notable strength, with the number of advertisers growing 50% from the previous year, and key verticals included pharmaceuticals, autos, retail, telecom and finance, the report said, adding that more than 90% of managed advertisers have adopted Reddit's tracking pixel, and ad pricing is beginning to act as a tailwind.

The platform's early monetization strategies have shown positive results, with ad pricing remaining stable even as impressions surged in 2024, Oppenheimer said, adding that "We believe Reddit's [more than] 2 [Billion] posts and [more than ] 20 [Billion] comments is one of the best-written and most authentic sources of human interaction on the internet."

Oppenheimer maintain an outperform rating on Reddit raised its price target to $150 from $125.

Price: 120.17, Change: +1.38, Percent Change: +1.16