Loop Capital Downgrades Reddit to Hold from Buy.
![Loop Capital Downgrades Reddit to Hold from Buy.](https://sgsnsimg.moomoo.com/sns_client_feed/102397652/20240717/1721173656555-random4025-102397652-android-org.jpeg/big?area=104&is_public=true)
Loop Capital is moving to the sidelines on Reddit $Reddit(RDDT.US$ as it doesn’t “believe the upside reward meaningfully outweighs the downside risk.”
Analyst Alan Gould downgraded the forum social network stock to hold from buy and reiterated a $75 per share price target. Gould’s forecast implies roughly 3% upside from Monday’s $72.98 close.
Reddit shares dropped 6.2% in morning trading Tuesday.
“The stock is now trading at well over twice its March IPO price; a significant premium revenue multiple to its peers, and there will likely be selling pressure when the lockup expires on August 9,” Gould wrote on Monday.
Reddit priced its initial public offering at $34 per share.
“We believe users, revenue and adjusted EBITDA are likely to beat our and Street estimates,” Gould cautioned despite his downgrade. “Even if 2025 revenue is 10% ahead of our projection, which is already slightly ahead of consensus, a 10X revenue multiple would then suggest an $81 price target, which is not sufficient upside in our opinion to maintain the Buy rating.”
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment