u/touuuuhhhny

This is partly a repost of a thread 5 days ago but without link/news back then. It is now available on yahoo news. Check the full text as it contains a few nuggets also on competition.

As always take it with a grain of salt and "who is DA Davidson?".

From the note:

Analyst Wyatt Swanson said the company remains under-monetized relative to peers and has positioned itself as a human-first social platform that will continue to attract more users and advertisers as it scales. The platform’s impressive gross profit margin of 91% demonstrates strong unit economics, while InvestingPro analysis suggests the stock is currently undervalued.

The analyst said Reddit’s scaling should support more favorable contract renewals with the leading LLMs, a broader base of advertisers, and further operating leverage. Swanson said year-to-date share performance with no declines in fundamentals represents a compelling opportunity to initiate coverage with a buy rating.

"Is there data that your team has about how buyers are feeling positive post-purchase?"

"We do have data; 84% of shoppers on Reddit say they feel more secure on their purchases after researching on the platform…It’s easy to make a $2 purchase on any platform. It takes seconds, and we can do that too, and lots of platforms do that. But buying a car is a high-stakes, one-off transaction that doesn’t occur every day. It needs some thought. We see massive success for high-priced goods and services."

aka ARPU go brrrrrrr 📈

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