Reddit's Q4 Earnings Preview: AI Partnerships and Ad Growth Boost Stock Performance
Earnings Release: Wednesday, after market close
Key Metrics to Watch:
* Adjusted Diluted EPS: $0.48 (consensus)
* Revenue: $405.5 million (consensus)
* Daily Active Users: 103.8 million (consensus)
Drivers of Growth:
* Ad Revenue Growth: Reddit's stock has benefited from strong ad revenue growth, fueled by licensing deals with AI giants.
* AI Partnerships: The company's partnership with OpenAI and content licensing deal with Google for its large language model have bolstered revenue.
* International Expansion: Reddit is focusing on expanding internationally, which is expected to drive user growth and ad revenue potential.
Analyst Outlook:
* Raymond James: Buy rating, price target raised to $250
* Deutsche Bank: Buy rating, price target raised to $235
* Jefferies: Buy rating, price target set at $230
Key Takeaways:
* Reddit's stock has outperformed its tech peers due to its AI partnerships and ad growth.
* The company's focus on international expansion and AI-driven initiatives is seen as a positive catalyst for future growth.
* Analysts remain optimistic about Reddit's prospects, citing its strong advertising revenue and data licensing deals.
Related News:
* Reddit's first-ever profit as a public company was driven by AI-fueled growth in advertising revenue.
* The company recently introduced an AI search tool, further solidifying its commitment to AI innovation.
* Better-than-expected revenues from advertising businesses like Snap, Pinterest, Meta, and Google provide positive indicators for Reddit's performance.