Raymond James raised its price target on Reddit (NYSE: RDDT) to $250 from $225 while maintaining a Strong Buy rating, sending shares up more than 6% intra-day on Monday. The broker updated its bottom-up U.S. logged-in ARPU analysis and outlined a bull case approaching $100, driven by higher ad load, materially stronger CPMs, and on-platform AI search that could lift query volume.
Agency checks cited e-commerce campaigns with targeting clearing above $6 CPM and up triple digits year over year, broadly consistent with revised internal campaign metrics that suggested about $4 CPM for generic (non-keyword) campaigns versus $2 in earlier work. Raymond James benchmarked Reddit’s U.S. revenue per thousand impressions (RPM) at roughly $2 currently, with a bull case near $6, compared with a peer average around $5 across Google, Meta, Pinterest, Snap, and Nextdoor.
The model assumed home-feed ad load rising from 13% (1-in-8) to 17% (1-in-7), still well below many peers that could flex to 25%–50%. For AI search/answers, the firm penciled queries increasing from 1.5 billion per month to 4 billion, with a 25% ad load, sub-1% click-through rate, and $1 cost-per-click—implying a roughly $350 million incremental revenue opportunity for formats that were not yet monetized.
The analysts described the tactical setup as neutral into the print but argued risk/reward remained attractive at current levels.
