Reddit (NYSE:RDDT) Stock Moved Down to "Market Perform" by Oppenheimer

Key Points

• Oppenheimer downgraded Reddit from “outperform” to “market perform,” although the broader analyst consensus remains “Moderate Buy” with an average price target of $217.68.
• Reddit exceeded third-quarter expectations, reporting $894.96 million in revenue, up 53% year over year, and $1.40 in earnings per share versus the $1.33 consensus estimate.
• Despite the earnings beat, shares fell 3.3% as investors weighed declining U.S. daily users, weaker search referrals, and concerns that login requirements and fourth-quarter guidance could pressure future growth and monetization.

Reddit (NYSE:RDDT - Get Free Report) was downgraded by equities research analysts at Oppenheimer from an "outperform" rating to a "market perform" rating in a research note issued to investors on Friday, Briefing.com reports.

Several other research analysts also recently commented on RDDT. Weiss Ratings reissued a "hold (c)" rating on shares of Reddit in a research note on Wednesday, August 5th. Raymond James Financial reaffirmed a "strong-buy" rating and issued a $205.00 price objective on shares of Reddit in a research note on Monday, August 17th. Telsey Advisory Group set a $240.00 target price on shares of Reddit in a report on Friday, July 31st. Sanford C. Bernstein reaffirmed a "market perform" rating and set a $180.00 target price on shares of Reddit in a report on Friday, July 31st. Finally, Wells Fargo & Company decreased their target price on shares of Reddit from $187.00 to $142.00 and set an "equal weight" rating on the stock in a research report on Friday, July 31st. Two analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and thirteen have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $217.68.

Reddit Trading Down 3.3%

Shares of NYSE RDDT opened at $130.29 on Friday. The stock has a market cap of $25.07 billion, a price-to-earnings ratio of 30.30, a P/E/G ratio of 0.62 and a beta of 2.05. Reddit has a 1-year low of $119.27 and a 1-year high of $263.50. The stock's 50-day moving average is $151.54 and its 200 day moving average is $161.02.

Reddit (NYSE:RDDT - Get Free Report) last released its earnings results 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. The company had revenue of $894.96 million during the quarter, compared to the consensus estimate of $874.91 million. Reddit had a return on equity of 29.02% and a net margin of 31.35%. Reddit's quarterly revenue was up 53.0% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.80 EPS. On average, analysts forecast that Reddit will post 5.28 EPS for the current fiscal year.

Insider Buying and Selling at Reddit

In other Reddit news, COO Jennifer L. Wong sold 75,000 shares of the business's stock in a transaction dated Friday, August 14th. The stock was sold at an average price of $178.55, for a total value of $13,391,250.00. Following the completion of the transaction, the chief operating officer owned 1,050,339 shares of the company's stock, valued at approximately $187,538,028.45. The trade was a 6.66% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Robert A. Sauerberg sold 5,128 shares of the company'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 transaction, the director owned 27,087 shares in the company, valued at $4,331,753.04. This represents a 15.92% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 306,052 shares of company stock worth $49,754,523. 28.48% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in RDDT. Integrity Alliance LLC. boosted its holdings in Reddit by 4.3% in the third quarter. Integrity Alliance LLC. now owns 2,536 shares of the company's stock worth $361,000 after purchasing an additional 104 shares during the last quarter. Oregon Public Employees Retirement Fund purchased a new stake in Reddit during the 3rd quarter valued at $2,564,000. Aware Super Pty Ltd as trustee of Aware Super raised its stake in Reddit by 203.8% during the 3rd quarter. Aware Super Pty Ltd as trustee of Aware Super now owns 53,091 shares of the company's stock valued at $7,562,000 after buying an additional 35,614 shares during the last quarter. Gerber Kawasaki Wealth & Investment Management lifted its holdings in shares of Reddit by 5.7% during the 3rd quarter. Gerber Kawasaki Wealth & Investment Management now owns 3,560 shares of the company's stock valued at $507,000 after buying an additional 192 shares during the period. Finally, Sumitomo Mitsui Trust Group Inc. lifted its holdings in shares of Reddit by 1.9% during the 3rd quarter. Sumitomo Mitsui Trust Group Inc. now owns 245,252 shares of the company's stock valued at $34,934,000 after buying an additional 4,659 shares during the period.

Key Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q3 results exceeded expectations: Reddit reported $894.96 million in revenue, up 53% year over year and above the $874.91 million consensus estimate. Adjusted earnings of $1.40 per share also surpassed the $1.33 estimate, compared with $0.80 a year earlier. Reddit Reports Third Quarter 2026 Results
• Positive Sentiment: Profitability remained strong: Net income increased 74%, while Reddit posted a 31.35% net margin and 29.02% return on equity. The results extend the company’s record of beating earnings expectations. Reddit Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: Analyst support provided a partial offset: Zacks Research upgraded Reddit from “hold” to “strong buy,” potentially supporting sentiment after the selloff. Zacks Research Rating
• Neutral Sentiment: Product changes could improve engagement but carry execution risk: Reddit is testing “For You” and “Following” feeds and plans to move toward a primarily logged-in experience to limit content scraping. More logins could improve user data and monetization, but may reduce casual traffic. Reddit Login Requirement
• Negative Sentiment: Growth quality and outlook raised concerns: U.S. daily users fell by 0.9 million, while international users increased by 15.2 million. Because U.S. users generate substantially more revenue, the geographic mix could pressure monetization. Reports also indicated that fourth-quarter guidance fell short of expectations. Reddit Earns More From Fewer U.S. Users
• Negative Sentiment: Search traffic is deteriorating: Declining Google referrals, partly attributed to AI-powered search, threaten a major source of new visitors. Requiring logins could further reduce open-web discovery, explaining why investors reacted negatively despite the earnings beat. Reddit Search Traffic Declines

About Reddit

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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