Reddit Rated Sell as Redburn Flags Risk From Google Algorithm
- Evidence boost to traffic from Google is ‘hitting a ceiling’
- Analysts see user growth stalling in fiscal year 2025
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The user growth experienced by Reddit Inc. is a “gift” from Alphabet Inc.’s Google that may have led to excessive bullishness on the social-media company, according to analysts who have become the stock’s biggest bear.
Redburn Atlantic’s James Cordwell and Joseph Barker initiated coverage of Reddit with a sell recommendation, saying that while the financial performance since its initial public offering has been “stellar,” Wall Street is not appreciating the vulnerability of its growth to Google Search. Additionally, the analysts see user growth stalling in 2025.