Nextdoor (KIND) is jumping 7.5% after investment bank Craig-Hallum started coverage of the shares with a Buy rating today. KIND, which sells ads, describes itself as "a neighborhood network" that provides information and enables consumers to communicate with others in their communities.

Why Craig-Hallum Is Bullish on KIND

Craig-Hallum believes that KIND's efforts to add more content to its platform can boost its growth. Specifically, Nextdoor is looking to cooperate with local writers, allowing its readers to obtain information about events both in their neighborhoods and nationwide.

Aerial view of a neighborhood with houses and a real estate brokerage office.

According to Craig-Hallum, the initiative can increase the frequency with which users visit Nextdoor and raise the amount of time that they spend on the platform. As a result, they may produce more organic content during their time on Nextdoor, making the platform more enjoyable, according to the investment bank.

Also importantly, the investment bank reported that KIND should have sufficient funds to bankroll this initiative, since it has high gross margins and a great deal of liquidity.

Craig-Hallum placed a $4 price target on KIND stock.

The Price Action of KIND

 In the last month, the shares have risen 10.8%, while they have surged 66% in the last year.

While we acknowledge the potential of KIND, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KIND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey