Jefferies initiated coverage on RDDT with a "buy" rating and a Street-high price target
Reddit Inc (NYSE:RDDT) is 4.7% higher to trade at $74.09 after Jefferies initiated research coverage on the social media stock with a "buy" rating and a Street-high $90 price target. The analyst in coverage cited advertising, data licensing, and accelerating user growth as catalysts for its new position. Separately, Needham hiked its price target on Reddit stock to $85 from $75.
Reddit went public on March 21 with an initial public offering (IPO) opening at $34. The shares hit an all-time high of $78.08 on July 15, and are up 76.2% over the last six months. Despite the healthy gains, Coming into today, seven of 16 covering brokerages recommended a "hold" or worse, and the 12-month average target price of $70.94 is a 3.8% discount to current level. This leaves room for additional bull notes in the form of upgrades and/or price-target hikes.
There's also short squeeze potential. Short interest is down 26.5% over the last two reporting periods, yet the 5.23 million shares sold short still accounts for 7.3% of the security's total available float.
Options traders are flocking to bullish bets today. At last check, 3,673 calls have crossed the tape, volume that's triple the average intraday amount and well above the 698 puts traded so far. New positions are being sold to open at the most popular position, the weekly 10/25 80-strike call.