Loop Capital lifts Reddit price target on OpenAI licensing deal

Loop Capital has raised its price target on Reddit (RDDT) from $60 to $75, citing its OpenAI licensing deal. Josh Lipton and Seana Smith discuss the call and Reddit's partnership with OpenAI.

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This post was written by Melanie Riehl

Video transcript

Let's get to our call of the day.

Loop Capital is raising its price target on Reddit from $60 to 75.

The note highlighting the open A I licencing deal.

So, Shawna Loop Capital.

Um, they like Reddit.

They still like Reddit.

Uh, they reiterate their buy.

They do raise their revenue estimates for this year and next year.

Uh, open a I member is gonna licence Reddit Reddit Data become a reddit advertising partner.

Reddit, in turn, is gonna bring open A I features to Reddit.

So the team at Loop obviously they clearly like the sound of all that they do.

They raise a revenue estimate here by 15 million and 20 million for the year and for next year talking about the booth at this licencing deal, they see that really having on Reddit's business here going forward.

They also talked about the fact that Reddit reintroduced ads on its discussion threads its fastest growing ad format here.

And they had not yet adjusted their model for that newest enhancement there.

So because of all that, they're seeing more of a bullish outlook here for Reddit.

I also thought it was interesting just in terms of the potential growth areas that Lou Cap mentioned going forward.

One of those areas that they highlighted would be growing the user economy, helping enable you to earn money on the Reddit platform that could include marketplace opportunities, that sort of thing.

They they use that as an example as one of those catalysts and then also the lock up period for shares 82% of shares subject to the lock up ending, which will likely they say, uh, likely be close to August 9th.

Assuming that those two, second quarter earnings are at the same cadence as their Q one report.

So again, maybe that could be a catalyst here for shares as well.