Reddit's (RDDT) growth runway remains long as the company makes it easier for advertisers to launch, scale and optimize advertisement spending on the platform, Morgan Stanley analysts wrote in a note Friday.
Reddit's revenue acceleration in Q2 is a testament to the company's "blossoming" advertisement offering, they wrote.
Reddit reported Q2 revenue of $500 million late Thursday, up from $281 million a year earlier. Analysts surveyed by FactSet expected $425.7 million.
Morgan Stanley raised Reddit's revenue estimates by 12% for 2025 and 22% for 2026, but said that higher revenue will likely be partially offset
by increased investment across sales, marketing, and research and development.
Morgan Stanley raised the company's price target to $230 from $170, and retained an overweight rating.
Price: 192.15, Change: +31.56, Percent Change: +19.65
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