Apr. 3 at 7:58 PM
Bank of America remains Neutral on Reddit despite its year-to-date pullback, citing solid long-term growth drivers but a premium valuation and macro sensitivity that limit a more bullish stance.
Analyst Justin Post cut the price target to
$175 (from
$205), shifting to an EBITDA-based valuation to reflect a more mature margin profile. At around
$136, Reddit trades at ~6.2x 2027E revenue and ~14x 2027E EBITDA—both well above peer medians (~3.5x and ~9x).
Positives include monetization upside vs. peers, potential revenue from data partnerships and search ads, and Reddit’s role as a key input for AI models, which could support stronger AI licensing deals by 2027.
Risks include slowing logged-in user growth, heavy reliance on Google for traffic, and rising competition from generative AI platforms.
Given its premium valuation, higher expected growth, and exposure to discretionary ad spending, BofA views Reddit as one of the most macro-sensitive names in its coverage.
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