JPMorgan Chase & Co. Has Lowered Expectations for Reddit (NYSE:RDDT) Stock Price

Key Points

• JPMorgan lowered Reddit’s price target from $185 to $150 while maintaining a neutral rating, though the new target still implies 63.51% upside from the prior close.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and average price target of $186.65; however, several firms have recently reduced their targets amid concerns about user growth and Google-related traffic pressure.
• Reddit exceeded quarterly expectations, reporting $1.40 in EPS and $894.96 million in revenue, up 53% year over year. Despite strong monetization, insiders sold more than 306,000 shares worth approximately $49.8 million over the past three months.

Reddit (NYSE:RDDT - Get Free Report) had its target price lowered by equities research analysts at JPMorgan Chase & Co. from $185.00 to $150.00 in a report issued on Friday, Benzinga reports. The brokerage presently has a "neutral" rating on the stock. JPMorgan Chase & Co.'s price objective points to a potential upside of 63.51% from the stock's previous close.

A number of other equities analysts have also recently commented on the company. UBS Group reiterated a "buy" rating on shares of Reddit in a report on Friday. Bank of America reaffirmed a "neutral" rating on shares of Reddit in a research report on Friday. Guggenheim cut their price objective on Reddit from $255.00 to $170.00 and set a "buy" rating for the company in a research report on Friday. DA Davidson decreased their target price on Reddit from $200.00 to $185.00 and set a "buy" rating on the stock in a report on Friday, September 18th. Finally, Telsey Advisory Group set a $240.00 price target on Reddit in a report on Friday, July 31st. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and fourteen have assigned a Hold rating to the stock. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $186.65.

Reddit Trading Up 0.0%

NYSE:RDDT opened at $91.74 on Friday. The stock has a market capitalization of $17.65 billion, a PE ratio of 18.72, a P/E/G ratio of 0.42 and a beta of 2.05. Reddit has a 1-year low of $89.28 and a 1-year high of $263.50. The firm has a fifty day simple moving average of $150.37 and a 200 day simple moving average of $160.26.

Reddit (NYSE:RDDT - Get Free Report) last posted its quarterly earnings results on Thursday, October 29th. The company reported $1.40 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.33 by $0.07. The firm had revenue of $894.96 million for the quarter, compared to analyst estimates of $874.91 million. Reddit had a net margin of 32.10% and a return on equity of 30.57%. The company's quarterly revenue was up 53.0% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.80 earnings per share. On average, equities analysts predict that Reddit will post 5.28 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Reddit news, COO Jennifer Wong sold 75,000 shares of Reddit stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $178.55, for a total value of $13,391,250.00. Following the completion of the sale, the chief operating officer owned 1,050,339 shares in the company, valued at $187,538,028.45. The trade was a 6.66% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Robert Sauerberg sold 5,128 shares of the business's stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total transaction of $820,069.76. Following the completion of the sale, the director directly owned 27,087 shares of the company's stock, valued at $4,331,753.04. This represents a 15.92% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 306,052 shares of company stock valued at $49,754,523. 28.48% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of RDDT. Evansbrook LLC increased its holdings in Reddit by 2.2% in the 1st quarter. Evansbrook LLC now owns 2,736 shares of the company's stock valued at $368,000 after buying an additional 59 shares during the period. Signaturefd LLC increased its holdings in Reddit by 7.6% in the 2nd quarter. Signaturefd LLC now owns 878 shares of the company's stock worth $152,000 after purchasing an additional 62 shares in the last quarter. EverSource Wealth Advisors LLC raised its position in Reddit by 48.1% in the second quarter. EverSource Wealth Advisors LLC now owns 197 shares of the company's stock valued at $34,000 after purchasing an additional 64 shares during the last quarter. Versant Capital Management Inc raised its position in Reddit by 31.1% in the second quarter. Versant Capital Management Inc now owns 291 shares of the company's stock valued at $51,000 after purchasing an additional 69 shares during the last quarter. Finally, Central Pacific Bank Trust Division boosted its stake in shares of Reddit by 8.6% during the third quarter. Central Pacific Bank Trust Division now owns 885 shares of the company's stock valued at $126,000 after purchasing an additional 70 shares in the last quarter.

Key Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Despite weaker U.S. daily active-user trends, Reddit’s revenue increased 53% year over year and advertising revenue per user rose substantially, suggesting strong engagement and advertiser monetization. A post-selloff analysis argued that the market’s reaction may be excessive. Reddit: Google Is Taking Its Traffic, But The Selloff Has Gone Too Far
• Positive Sentiment: Reddit’s revenue growth has overtaken The Trade Desk’s in a recent comparison, highlighting the company’s continued expansion and improving monetization potential. Reddit vs. The Trade Desk: One's Revenue Growth Overtook the Other's Lead
• Neutral Sentiment: RBC Capital reaffirmed its Hold rating, indicating neither a material improvement nor deterioration in its investment view. RBC Capital Reaffirms Their Hold Rating on Reddit
• Negative Sentiment: Investors are concerned that Google’s AI search changes are reducing Reddit’s unpaid search traffic. The company’s move toward a logged-in-only experience could protect monetization but may limit user growth and raise customer-acquisition costs. Reddit Stock Plunges After Google AI Cuts U.S. Traffic
• Negative Sentiment: Several firms reduced expectations: Oppenheimer and Citizens JMP downgraded Reddit to Market Perform, while Citigroup, Cantor Fitzgerald, Truist Financial, B. Riley, Wedbush and Wells Fargo cut their price targets or forecasts. Analyst Rating and Target Changes
• Negative Sentiment: The latest selloff followed quarterly results that beat revenue and earnings estimates but were overshadowed by an unfavorable user outlook, reinforcing concerns about traffic growth and future monetization. Reddit Stock Sinks as Q3 Results Clash With User Outlook

Reddit Company Profile

Reddit, Inc operates a global online platform where users participate in communities organized around shared interests, topics and activities. Members can submit text posts, links, images and videos, as well as comment on and vote on content. The platform includes thousands of communities, commonly known as subreddits, covering subjects such as news, entertainment, technology, sports, finance and lifestyle.

Reddit generates revenue primarily through digital advertising, offering advertisers access to audiences based on community interests and user engagement.

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