Reddit falls after Redburn Atlantic starts coverage at 'sell'

Reddit's RDDT.N shares down 4.6% at $122.31 on Mon after Redburn Atlantic initiates coverage of social media firm with 'sell' rating

Redburn sets PT at Street-low $75, per LSEG data, implying ~42% downside to stock's close on Fri

Though RDDT's financial performance has been "stellar" since last year's IPO, analyst team led by James Cordwell point to "the vulnerability of Reddit's growth to Google Search and the structural challenges of Reddit's nascent advertising proposition"

The stock's current valuation, which it projects at 22x FY27 EV/adj EBITDA, is at an unjustified premium to its peers, the analysts said, adding they see “material downside” to consensus estimates

Earlier this month, co launched new content moderation and analytics tools in co's latest step to boost platform engagement

In Feb, RDDT missed analysts' expectations for daily active unique visitors, hit by Alphabet's GOOGL.O Google's search algorithm change

Now, of 22 brokerages covering RDDT, recommendation breakdown is 14 "strong buy" or "buy", 6 "hold", and 2 "sell" or "strong sell" - LSEG

Median PT of $210 unchanged from a month ago, but up from $180 on Jan 17

With move on Mon, shares down ~25% YTD

The microblogging platform behind the popular WallStreetBets forum, went public last Mar after IPO priced at $34