Needham analysts reaffirmed a Buy rating on Reddit (RDDT), maintaining a target price of $220 despite the stock experiencing a significant 40% pullback since the earnings report released on February 12.

In their latest update, Needham highlighted shifting investor sentiments during Q1 2025, emphasizing the evolution of concerns compared to previous quarters. They noted the absence of repeated issues, suggesting that perceptions of Reddit are rapidly changing.

Despite the downturn, Needham has increased profitability forecasts for 2025 and 2026, showing confidence in Reddit’s growth trajectory, projecting a robust 30% year-over-year revenue increase. This places Reddit at the top among its peer group.

Furthermore, the report included a comparative analysis of bullish and bearish narratives over past quarters, underscoring the dynamic discussions among investors. As the platform continues to grow in a competitive landscape, Needham believes the current price levels present a promising entry point for investors seeking long-term growth.