Reddit (NYSE:RDDT) Upgraded at Zacks Research

Key Points

• Zacks Research upgraded Reddit to “strong buy” from “hold,” while the broader analyst consensus remains “moderate buy” with an average price target of $219.29.
• Reddit reported strong quarterly results, including EPS of $1.25 versus a $0.95 estimate and revenue of $804.91 million, up 61% year over year. Analysts expect full-year EPS of $5.27.
• Shares opened at $134.72, down 1.3%, amid concerns about slowing growth and valuation; insiders sold $49.8 million of stock during the latest quarter.

Reddit (NYSE:RDDT - Get Free Report) was upgraded by equities research analysts at Zacks Research from a "hold" rating to a "strong-buy" rating in a report issued on Tuesday, Zacks reports.

A number of other brokerages have also commented on RDDT. B. Riley Financial raised their price objective on shares of Reddit from $250.00 to $270.00 and gave the stock a "buy" rating in a report on Friday, July 31st. JPMorgan Chase & Co. dropped their price target on Reddit from $200.00 to $185.00 and set a "neutral" rating on the stock in a research note on Friday, July 31st. Deutsche Bank Aktiengesellschaft set a $200.00 price target on Reddit in a report on Friday, July 31st. BNP Paribas Exane initiated coverage on Reddit in a research report on Friday, September 18th. They set a "neutral" rating and a $180.00 price objective for the company. Finally, Wells Fargo & Company decreased their price objective on Reddit from $187.00 to $142.00 and set an "equal weight" rating for the company in a report on Friday, July 31st. Three research analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and nine have given a Hold rating to the company's stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $219.29.

Reddit Stock Down 1.3%

Shares of RDDT stock opened at $134.72 on Tuesday. Reddit has a 12-month low of $119.27 and a 12-month high of $263.50. The firm has a market capitalization of $25.92 billion, a price-to-earnings ratio of 31.33, a price-to-earnings-growth ratio of 0.67 and a beta of 2.05. The firm has a fifty day moving average of $151.97 and a 200-day moving average of $161.59.

Reddit (NYSE:RDDT - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The company reported $1.25 EPS for the quarter, topping the consensus estimate of $0.95 by $0.30. Reddit had a return on equity of 29.02% and a net margin of 31.35%. The business had revenue of $804.91 million for the quarter, compared to the consensus estimate of $731.00 million. During the same quarter last year, the business posted $0.45 EPS. The firm's revenue was up 61.0% compared to the same quarter last year. Research analysts expect that Reddit will post 5.27 earnings per share for the current year.

Insider Buying and Selling at Reddit

In other news, COO Jennifer L. Wong sold 60,000 shares of the firm's 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 completion of the sale, the chief operating officer owned 1,012,226 shares in the company, valued at approximately $152,390,624.30. This trade represents a 5.60% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. 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 that occurred on Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total value of $820,069.76. Following the completion of the transaction, the director directly owned 27,087 shares in the company, valued at $4,331,753.04. The trade was a 15.92% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 306,052 shares of company stock valued at $49,754,523 in the last quarter. 28.48% of the stock is currently owned by insiders.

Institutional Trading of Reddit

Several hedge funds and other institutional investors have recently bought and sold shares of RDDT. Sunbelt Securities Inc. boosted its position in Reddit by 87.5% during the 1st quarter. Sunbelt Securities Inc. now owns 195 shares of the company's stock worth $26,000 after buying an additional 91 shares during the period. EverSource Wealth Advisors LLC increased its position in Reddit by 48.1% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 197 shares of the company's stock valued at $34,000 after acquiring an additional 64 shares during the period. Beacon Investment Advisory Services Inc. acquired a new position in shares of Reddit during the second quarter worth $35,000. Ascentis Independent Advisors bought a new stake in shares of Reddit in the first quarter worth $30,000. Finally, Hager Investment Management Services LLC grew its stake in shares of Reddit by 522.2% in the second quarter. Hager Investment Management Services LLC now owns 280 shares of the company's stock worth $49,000 after purchasing an additional 235 shares during the last quarter.

More Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Analysts expect Reddit to extend its record of quarterly earnings beats since its initial public offering. Strong advertising growth, artificial-intelligence initiatives and the potential for another revenue beat could help revive investor confidence. Reddit Q3 Earnings Preview
• Positive Sentiment: Truist Financial reiterated a Buy rating, indicating that the firm sees potential in Reddit’s advertising business and longer-term growth opportunities. Truist Buy Rating
• Neutral Sentiment: Reddit introduced a “For You” feed alongside its “Following” feed, adopting a recommendation-based format popularized by TikTok. The change could improve user engagement and ad inventory, although its financial impact is not yet clear. Reddit Introduces For You Feed
• Negative Sentiment: Recent selling reflects fears of slower growth ahead of the earnings release. Investors are likely to focus on user trends, advertising momentum and management’s outlook to determine whether Reddit’s valuation can be sustained. Reddit Slower-Growth Fears
• Negative Sentiment: Despite strong prior profitability and revenue growth, analysts caution that Reddit’s premium valuation, rising costs and nearly 40% recent decline leave limited room for an earnings or guidance disappointment. Reddit Q3 Buy Sell or Hold Analysis

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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