Reddit (NYSE:RDDT) Price Target Cut to $210.00 by Analysts at Truist Financial

Key Points

• Truist Financial cut Reddit’s price target from $275 to $210 but maintained a “buy” rating, implying substantial upside from the stock’s recent $90.85 price.
• Analyst sentiment has become more mixed, with KeyCorp and Oppenheimer downgrading the stock, although MarketBeat’s consensus remains “Moderate Buy” with an average target of $205.42.
• Reddit exceeded third-quarter earnings and revenue expectations, but shares fell sharply as investors focused on potential declines in daily active users, weaker Google referral traffic and growing concerns about AI’s impact on web traffic.

Reddit (NYSE:RDDT - Get Free Report) had its target price reduced by investment analysts at Truist Financial from $275.00 to $210.00 in a research note issued on Friday, Benzinga reports. The brokerage currently has a "buy" rating on the stock. Truist Financial's price objective indicates a potential upside of 131.14% from the company's current price.

Other research analysts have also issued reports about the stock. KeyCorp lowered shares of Reddit from an "overweight" rating to a "sector weight" rating in a report on Friday. DA Davidson lowered their price objective on Reddit from $200.00 to $185.00 and set a "buy" rating for the company in a research note on Friday, September 18th. Zacks Research upgraded shares of Reddit from a "hold" rating to a "strong-buy" rating in a research note on Tuesday. Robert W. Baird set a $185.00 price objective on Reddit in a research report on Friday, July 31st. Finally, Oppenheimer downgraded shares of Reddit from an "outperform" rating to a "market perform" rating in a report on Friday. Two research analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and thirteen have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $205.42.

Reddit Price Performance

NYSE:RDDT traded down $38.75 during mid-day trading on Friday, reaching $90.85. 21,132,767 shares of the company's stock traded hands, compared to its average volume of 5,462,794. The company has a 50 day moving average price of $151.54 and a 200-day moving average price of $161.02. The firm has a market capitalization of $17.48 billion, a price-to-earnings ratio of 21.04, a PEG ratio of 0.62 and a beta of 2.05. Reddit has a 12-month low of $91.05 and a 12-month high of $263.50.

Reddit (NYSE:RDDT - Get Free Report) last issued its quarterly earnings data on Thursday, October 29th. The company reported $1.40 earnings per share for the quarter, topping analysts' consensus estimates of $1.33 by $0.07. Reddit had a return on equity of 29.02% and a net margin of 31.35%. The firm had revenue of $894.96 million for the quarter, compared to analyst estimates of $874.91 million. During the same period last year, the company earned $0.80 EPS. The business's quarterly revenue was up 53.0% compared to the same quarter last year. As a group, analysts forecast that Reddit will post 5.28 EPS for the current year.

Insider Activity at Reddit

In related news, Director Robert A. Sauerberg sold 5,128 shares of Reddit stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total transaction of $820,069.76. Following the transaction, the director owned 27,087 shares in the company, valued at approximately $4,331,753.04. The trade was a 15.92% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Steve Huffman sold 18,000 shares of the company's stock in a transaction on Friday, August 14th. The stock was sold at an average price of $178.16, for a total transaction of $3,206,880.00. Following the completion of the transaction, the chief executive officer directly owned 373,814 shares of the company's stock, valued at $66,598,702.24. This represents a 4.59% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 306,052 shares of company stock worth $49,754,523. Corporate insiders own 28.48% of the company's stock.

Institutional Investors Weigh In On Reddit

Institutional investors have recently added to or reduced their stakes in the stock. Wellington Management Group LLP grew its holdings in Reddit by 21.8% during the 2nd quarter. Wellington Management Group LLP now owns 1,564,535 shares of the company's stock valued at $271,572,000 after purchasing an additional 280,030 shares during the last quarter. State Street Corp boosted its holdings in Reddit by 8.7% during the 2nd quarter. State Street Corp now owns 2,979,587 shares of the company's stock valued at $517,197,000 after acquiring an additional 237,523 shares during the period. Moore Capital Management LP grew its position in Reddit by 611.4% in the 2nd quarter. Moore Capital Management LP now owns 12,577 shares of the company's stock valued at $2,183,000 after acquiring an additional 10,809 shares during the last quarter. Light Street Capital Management LLC bought a new position in Reddit in the 2nd quarter valued at $31,678,000. Finally, PensionDanmark Pensionsforsikringsaktieselskab increased its stake in Reddit by 102.3% in the second quarter. PensionDanmark Pensionsforsikringsaktieselskab now owns 19,120 shares of the company's stock worth $3,319,000 after purchasing an additional 9,670 shares during the period.

Key Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Reddit reported third-quarter adjusted earnings of $1.40 per share, exceeding the roughly $1.33 analyst consensus, while revenue of approximately $895 million surpassed expectations and increased 53% year over year. Reddit third-quarter earnings report
• Positive Sentiment: B. Riley maintained a “buy” rating despite reducing its price target from $270 to $190, indicating that some analysts still see substantial long-term upside. B. Riley Reddit rating
• Neutral Sentiment: Analyst sentiment became more mixed: Cantor Fitzgerald cut its target to $120 and moved to “neutral,” while Oppenheimer and Citizens JMP downgraded Reddit to “market perform.” Bernstein also lowered its target to $120 from $180. Analyst reactions to Reddit earnings
• Negative Sentiment: Management warned that daily active unique visitors could decline by a low-double-digit percentage in the fourth quarter from about 130 million if Google referral traffic continues to weaken. Investors viewed the user outlook and revenue guidance as below expectations. Reddit user-growth concerns
• Negative Sentiment: AI-powered search is reducing traffic from Google and other search channels, raising concerns about Reddit’s ability to attract and monetize new users. The company plans to test requiring visitors to log in, which could further reduce open-web traffic even as it limits scraping. Reddit search traffic and login changes
• Negative Sentiment: The market-wide technology selloff linked to fears that AI is disrupting established internet traffic models added pressure to RDDT, contributing to a move toward its one-year low. Nasdaq and AI fears

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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