Piper Sandler analysts raised their price target on Reddit (NYSE:RDDT) to $197 from $150, maintaining an Overweight rating on the stock. The revision reflects the platform’s promising growth trajectory, underpinned by increasing user engagement and monetization opportunities.

Recent data from Reddit’s Ads Manager indicates steady month-over-month growth in user numbers and stable to slightly declining cost-per-click metrics. This suggests a healthy expansion in user base and advertising inventory, setting the stage for robust monetization. According to the analysts, product innovations, including enhanced search functionality and the introduction of Answers, are expected to further drive engagement and advertiser interest.

The company’s guidance appears conservative, with projections for fourth-quarter revenue of $402 million, marking a 61% year-over-year increase, and EBITDA of $116 million.