Investors Purchase Large Volume of Reddit Call Options (NYSE:RDDT)

Key Points

• Reddit call-option activity surged: Investors purchased 94,890 call options, more than double the average volume of 47,256, signaling heightened bullish speculation around RDDT.
• Analysts remain broadly optimistic: Reddit has a “Moderate Buy” consensus rating and an average price target of $220.90, while recent targets range from $200 to $270.
• Strong operating results supported the stock: Reddit reported quarterly revenue of $804.91 million, up 61% year over year, and EPS of $1.25 versus expectations of $0.95; however, insiders have sold $25.6 million of shares over the past three months.

Reddit Inc. (NYSE:RDDT - Get Free Report) saw unusually large options trading activity on Friday. Stock investors bought 94,890 call options on the stock. This is an increase of 101% compared to the average volume of 47,256 call options.

Insider Buying and Selling

In other Reddit news, CEO Steve Ladd Huffman sold 18,000 shares of the business's stock in a transaction dated Tuesday, June 30th. The shares were sold at an average price of $173.13, for a total value of $3,116,340.00. Following the transaction, the chief executive officer owned 373,814 shares in the company, valued at approximately $64,718,417.82. The trade was a 4.59% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jennifer L. Wong sold 39,167 shares of the company's stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $158.52, for a total value of $6,208,752.84. Following the transaction, the chief operating officer directly owned 1,088,451 shares of the company's stock, valued at $172,541,252.52. The trade was a 3.47% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 151,141 shares of company stock valued at $25,635,785 over the last three months. 28.48% of the stock is owned by company insiders.

Hedge Funds Weigh In On Reddit

Institutional investors have recently bought and sold shares of the stock. Capital World Investors purchased a new stake in Reddit during the fourth quarter valued at $1,293,258,000. Norges Bank purchased a new position in shares of Reddit in the 4th quarter worth $372,047,000. Invesco Ltd. increased its holdings in shares of Reddit by 419.0% in the 3rd quarter. Invesco Ltd. now owns 1,487,941 shares of the company's stock worth $342,212,000 after buying an additional 1,201,237 shares during the last quarter. State Street Corp increased its holdings in shares of Reddit by 138.5% in the 2nd quarter. State Street Corp now owns 2,030,139 shares of the company's stock worth $305,678,000 after buying an additional 1,178,890 shares during the last quarter. Finally, Vanguard Group Inc. raised its position in shares of Reddit by 8.9% during the 4th quarter. Vanguard Group Inc. now owns 13,322,048 shares of the company's stock valued at $3,062,339,000 after buying an additional 1,083,540 shares in the last quarter.

Analysts Set New Price Targets

RDDT has been the subject of several recent research reports. Guggenheim reiterated a "buy" rating on shares of Reddit in a report on Friday, July 31st. Citigroup restated a "market outperform" rating on shares of Reddit in a research note on Friday, July 31st. The Goldman Sachs Group reaffirmed a "neutral" rating and set a $200.00 price objective on shares of Reddit in a research report on Friday, May 1st. Wedbush lowered their price objective on Reddit from $250.00 to $221.00 and set an "outperform" rating for the company in a research note on Friday, July 31st. Finally, B. Riley Financial increased their target price on Reddit from $250.00 to $270.00 and gave the stock a "buy" rating in a research note on Friday, July 31st. Two analysts have rated the stock with a Strong Buy rating, nineteen have given a Buy rating and eleven have issued a Hold rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $220.90.

Trending Headlines about Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Index inclusion should create forced demand. Mutual funds and exchange-traded funds that track the S&P 500 will generally need to purchase RDDT shares, potentially increasing institutional ownership, liquidity and near-term demand. Reddit stock soars after S&P 500 inclusion announcement
• Positive Sentiment: The announcement represents an important validation for Reddit. The company’s addition less than two years after its public listing may improve its visibility with institutional investors and broaden its shareholder base. Reddit shares jump on inclusion in S&P 500
• Positive Sentiment: Advertising momentum remains a supporting factor. Recent coverage highlights Reddit’s expanding advertiser base, stronger competition with Meta and Snap, and its AI-powered Reddit Max advertising tools. Marketers are increasingly viewing Reddit as valuable for influencing consumer choices and training or guiding large language models. Reddit strengthens ad game against Meta and Snap

Reddit Stock Performance

Shares of RDDT stock traded up $22.10 on Friday, reaching $180.22. The stock had a trading volume of 9,453,197 shares, compared to its average volume of 5,264,784. Reddit has a 1 year low of $119.27 and a 1 year high of $282.95. The company has a 50 day simple moving average of $175.21 and a 200 day simple moving average of $159.70. The stock has a market cap of $34.67 billion, a P/E ratio of 41.87, a price-to-earnings-growth ratio of 0.52 and a beta of 2.03.

Reddit (NYSE:RDDT - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The company reported $1.25 earnings per share for the quarter, topping the consensus estimate of $0.95 by $0.30. Reddit had a net margin of 31.35% and a return on equity of 29.02%. The business had revenue of $804.91 million for the quarter, compared to analysts' expectations of $731.00 million. During the same quarter last year, the company posted $0.45 EPS. The company's revenue was up 61.0% compared to the same quarter last year. On average, equities research analysts anticipate that Reddit will post 5.22 earnings per share for the current fiscal year.

About Reddit

Reddit is an online social news aggregation, discussion and content-sharing platform organized around user-created communities called "subreddits," each focused on a particular topic or interest. Registered users submit links, text posts, images and video, and community members vote and comment to surface popular content. The site is accessed via its web platform and mobile apps for iOS and Android, and it supports live events such as Ask Me Anything (AMA) sessions and community-driven discussions.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is headquartered in San Francisco and serves a global audience with particularly large user bases in the United States and other English-speaking markets.

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