Reddit (RDDT) PT Raised to $65 at Deutsche Bank

Deutsche Bank analyst Ben Black raised the price target on Reddit (NYSE: RDDT) to $65.00 (from $62.00) while maintaining a Buy rating

The analyst comments "Yesterday, Reddit announced a deal to license its data to OpenAI

[{"selector":"#anim-aab3bf97-b2da-41d8-90aa-f37c0ef695fc","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-4cef7df8-586f-426e-af78-e0d121738bf0","keyframes":{"transform":["translate3d(0px, 111.14841%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

as well as to incorporate Reddit content into ChatGPT‘s chatbot and other products. While terms were not disclosed, of note was Reddit's ability to build AI

[{"selector":"#anim-012c653c-1de0-4e34-83df-e7186fcb7c96","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c1ecf2ac-b4a0-4a25-abd1-be73c7c7f715","keyframes":{"transform":["translate3d(0px, 103.15006%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

powered features on OpenAI's platform of AI models and OpenAI becoming a Reddit advertising partner.

[{"selector":"#anim-683f08a0-a4b4-4441-81eb-8877549e5578","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d93a73e3-1034-4e8b-a954-e91f750d18eb","keyframes":{"transform":["translate3d(0px, 134.30278%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

In a similar vein to the Google deal, we think the value of the deal may have been sold at a discount given these added benefits. That said,

[{"selector":"#anim-b056797c-7c93-4243-9547-c666eb9b4920","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1e0f20ff-1f4e-4e9c-ad0c-c719c9fa5fbf","keyframes":{"transform":["translate3d(0px, 111.79393%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

if the cash terms are similar to the Google deal, we believe it could provide $54mn of annual EBITDA, assuming 90% incremental margins.

[{"selector":"#anim-7ddabe75-4873-46e6-8f7e-c38ef4b5e332","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b5ab3a07-914a-4eb3-b1e8-da2614dd4a68","keyframes":{"transform":["translate3d(0px, 122.01898%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

Currently in our model we are assuming two LLM deals signed through 2025, though this second deal came earlier than anticipated, and now that two have already been signed

[{"selector":"#anim-a1f0d825-9c40-417c-94ca-2dc9de5b0a6a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-44e10aae-41b9-4f03-a87a-7c5391193ce7","keyframes":{"transform":["translate3d(0px, 103.15006%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]