Guggenheim reiterated its "Buy" rating for Reddit (NYSE:RDDT) on Wednesday. The firm set a $255 price target. Guggenheim bases its positive outlook on potential continued strength in Reddit's advertising business.
Guggenheim noted headwinds, including a recent decline in Google search referral traffic. However, the firm highlighted positive data for user engagement. Third-party data showed significant year-over-year growth in app downloads for September. Daily active users on the app also saw significant year-over-year growth in September.
Guggenheim anticipates Reddit's growth will be driven by increased advertiser adoption. Platform improvements and expansion into search and shopping features will also drive growth.