(Bloomberg) -- Reddit Inc. shares fell as much as 5.1% Monday to hit the lowest level since its March trading debut after a slew of Wall Street analysts initiated coverage of the social-media company.

So far, the view from Wall Street tips bullish, but analysts are split on the company’s growth potential and whether or not it is fairly valued at current levels. Of analysts that have started coverage, eight have buy-equivalent ratings, five say to hold and only two recommend selling shares, according to data compiled by Bloomberg. 

The average price target of nearly $50 implies about 22% upside from where shares currently trade, but is still solidly below the all-time high close of about $65 that Reddit hit in its first days as a public company. 

Read more: Reddit Soars 48% in Debut as AI Pitch Gets Warm Reception (3)

Reddit bulls see growth ahead, but don’t anticipate that shares will return to record-high levels in the next 12 months.

“We view RDDT as an iconic internet asset likely to grow users and revenues rapidly in coming years,” Piper Sandler analysts led by Thomas Champion wrote in a Monday note initiating coverage with an overweight rating and $50 price target. He added that the current valuation looks “undemanding” given the potential for upside and a pivot to profitability.

Reddit could also benefit from the generative artificial intelligence trend, according to Needham’s Laura Martin. She gives the company a buy rating and $55 price target, so far the highest on Wall Street, per data compiled by Bloomberg.

The company’s “library of 18 years of human conversations, updated daily, is increasingly valuable for training large language models,” she wrote in a Monday note, adding that Reddit is the “best source” of this type of information that will be necessary to train GenAI.

Read more: Reddit Dips as Analysts Weigh Growth and Valuation: Street Wrap

Analysts with hold-equivalent ratings see Reddit as fairly valued and expect limited upside, at least in the near-term.

The valuation is “healthy” at current levels, according to JPMorgan’s Doug Anmuth, who initiated coverage with a neutral rating and $47 price target. While Reddit has a compelling narrative in ad monetization and potential in AI, execution is critical and smaller platforms have traditionally struggled to compete with companies such as Alphabet Inc.’s Google and Meta Platforms Inc., he wrote.

Morgan Stanley’s Brian Nowak also called out the company’s valuation in a note announcing his equal-weight rating and $45 price target.

The “valuation leaves us on the sidelines as we wait for evidence of outsized user growth and/or faster execution,” Nowak wrote.

Reddit is expected to report its first quarterly earnings release as a public company on May 7 after the market closes.

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