Reddit (NYSE:RDDT) Stock Moved Down to "Hold" by Evercore

Key Points

• Evercore downgraded Reddit to “Hold” from “Outperform” while maintaining a $120 price target, implying 31.8% upside from the prior close.
• Reddit’s latest quarter exceeded expectations, with EPS of $1.40 versus $1.33 expected and revenue of $894.96 million, up 53% year over year. Despite the downgrade, analysts’ average rating remains “Moderate Buy,” with a consensus price target of $180.91.
• Reddit shares opened at $91.05, near their 52-week low of $89.28 and well below their 50-day and 200-day moving averages. Insiders have sold approximately $46.9 million of stock over the past three months, adding to investor caution.

Reddit (NYSE:RDDT - Get Free Report) was downgraded by Evercore from an "outperform" rating to a "hold" rating in a research note issued to investors on Monday, MarketBeat.com reports. They currently have a $120.00 price objective on the stock. Evercore's price target would indicate a potential upside of 31.80% from the stock's previous close.

A number of other equities research analysts have also weighed in on RDDT. Deutsche Bank Aktiengesellschaft set a $200.00 price target on shares of Reddit in a report on Friday, July 31st. Piper Sandler restated an "overweight" rating and issued a $195.00 price target (down from $215.00) on shares of Reddit in a research note on Friday, July 31st. Sanford C. Bernstein reissued a "market perform" rating and set a $120.00 price objective (down from $180.00) on shares of Reddit in a report on Friday. Guggenheim decreased their price target on Reddit from $255.00 to $170.00 and set a "buy" rating for the company in a research note on Friday. Finally, Zacks Research upgraded Reddit from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, October 27th. Two analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and fifteen have issued a Hold rating to the company. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $180.91.

Reddit Price Performance

NYSE RDDT opened at $91.05 on Monday. The firm has a market capitalization of $17.52 billion, a P/E ratio of 18.58, a P/E/G ratio of 0.62 and a beta of 2.05. Reddit has a 1-year low of $89.28 and a 1-year high of $263.50. The business's 50-day simple moving average is $149.13 and its 200-day simple moving average is $159.42.

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

Insider Activity at Reddit

In related news, COO Jennifer Wong sold 60,000 shares of Reddit stock in a transaction dated Wednesday, October 14th. The shares were sold at an average price of $150.55, for a total transaction of $9,033,000.00. Following the sale, the chief operating officer directly owned 1,012,226 shares in the company, valued at $152,390,624.30. The trade was a 5.60% decrease in their ownership of the stock. 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, CEO Steve Huffman sold 17,308 shares of the firm's stock in a transaction dated Tuesday, October 13th. The shares were sold at an average price of $158.57, for a total transaction of $2,744,529.56. Following the transaction, the chief executive officer directly owned 336,432 shares in the company, valued at approximately $53,348,022.24. The trade was a 4.89% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 288,052 shares of company stock worth $46,878,483 in the last three months. 28.48% of the stock is owned by company insiders.

Hedge Funds Weigh In On Reddit

A number of hedge funds have recently modified their holdings of the stock. Alps Advisors Inc. boosted its position in Reddit by 40.5% during the third quarter. Alps Advisors Inc. now owns 18,536 shares of the company's stock valued at $2,640,000 after purchasing an additional 5,345 shares during the last quarter. CenterBook Partners LP bought a new stake in shares of Reddit during the 3rd quarter worth $2,169,000. International Assets Investment Management LLC grew its position in shares of Reddit by 13.8% in the third quarter. International Assets Investment Management LLC now owns 15,907 shares of the company's stock valued at $2,379,000 after purchasing an additional 1,931 shares during the last quarter. Kestra Advisory Services LLC increased its position in Reddit by 48.2% in the 3rd quarter. Kestra Advisory Services LLC now owns 33,548 shares of the company's stock worth $4,779,000 after buying an additional 10,908 shares during the period. Finally, Commonwealth Equity Services LLC increased its position in Reddit by 7.5% during the third quarter. Commonwealth Equity Services LLC now owns 38,368 shares of the company's stock worth $5,465,000 after acquiring an additional 2,682 shares during the period.

Key Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Reddit’s underlying financial results remain strong, with quarterly revenue up 53% year over year and earnings exceeding consensus expectations. The company’s advertising engagement and monetization growth provide support for the long-term investment case. Reddit: Google Is Taking Its Traffic, But The Selloff Has Gone Too Far
• Positive Sentiment: KeyCorp slightly raised its fourth-quarter 2026 EPS estimate to $1.75 from $1.74. Several analysts still maintain price targets above the current share price, including Deutsche Bank’s $165 target and Jefferies’ $155 target, although both reduced their previous forecasts.
• Neutral Sentiment: KeyCorp retained a “Sector Weight” rating. The firm expects $6.39 in FY2027 EPS, while consensus calls for $5.28 in current-year EPS; however, the FY2027 estimate was cut from $6.92, signaling a more cautious outlook.
• Negative Sentiment: Investors are concerned that Google search changes and AI-generated search results are reducing Reddit’s U.S. traffic. The resulting uncertainty around user growth, search visibility and future customer-acquisition costs has overshadowed the company’s strong revenue performance. RDDT Q3 deep dive: Search traffic drop and cautious guidance weigh on results
• Negative Sentiment: Analysts broadly lowered their expectations: JPMorgan cut its target to $150 and assigned a neutral rating, while Evercore and Loop Capital downgraded the stock to “in-line” and “hold.” BNP Paribas Exane, Goldman Sachs, Piper Sandler, Jefferies and Deutsche Bank also reduced price targets, reinforcing near-term investor caution.
• Negative Sentiment: A law firm announced an investigation into potential securities-law violations or other unlawful business practices involving Reddit and its management. The investigation is preliminary, but it adds legal and reputational risk. Reddit securities investigation

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.