Reddit (NYSE:RDDT) Trading 4% Higher - Still a Buy?

Key Points

• Reddit shares rose 4% to about $152.34, although trading volume was significantly below average. The stock remains below its 50-day and 200-day moving averages.
• Recent earnings exceeded expectations: Reddit reported $1.25 in EPS and $804.91 million in revenue, with revenue increasing 61% year over year. Analysts maintain a consensus “Moderate Buy” rating and an average price target of $221.10.
• Analyst views are mixed, with some firms cutting targets while others remain bullish. Insiders sold roughly $36.4 million of stock over the past 90 days, while several institutional investors increased their holdings.

Reddit Inc. (NYSE:RDDT - Get Free Report) was up 4% during trading on Thursday . The company traded as high as $152.26 and last traded at $152.3370. 750,305 shares were traded during mid-day trading, a decline of 86% from the average session volume of 5,451,752 shares. The stock had previously closed at $146.44.

Analyst Ratings Changes

A number of equities research analysts have recently weighed in on the company. Wells Fargo & Company cut their price target on Reddit from $187.00 to $142.00 and set an "equal weight" rating for the company in a research note on Friday, July 31st. Citigroup restated a "market outperform" rating on shares of Reddit in a report on Monday, August 24th. JPMorgan Chase & Co. cut their price objective on shares of Reddit from $200.00 to $185.00 and set a "neutral" rating on the stock in a research report on Friday, July 31st. Telsey Advisory Group set a $240.00 target price on shares of Reddit in a research note on Friday, July 31st. Finally, B. Riley Financial increased their price target on shares of Reddit from $250.00 to $270.00 and gave the stock a "buy" rating in a research note on Friday, July 31st. Two research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and eleven have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average price target of $221.10.

Reddit Price Performance

The company has a market cap of $30.09 billion, a price-to-earnings ratio of 36.37, a P/E/G ratio of 0.69 and a beta of 2.02. The firm has a fifty day simple moving average of $168.67 and a 200 day simple moving average of $159.06.

Reddit (NYSE:RDDT - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The company reported $1.25 earnings per share for the quarter, topping analysts' consensus estimates 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 during the quarter, compared to analysts' expectations of $731.00 million. During the same period in the previous year, the company earned $0.45 earnings per share. Reddit's revenue for the quarter was up 61.0% on a year-over-year basis. Analysts expect that Reddit Inc. will post 5.27 earnings per share for the current year.

Insider Activity

In other Reddit news, CEO Steve Huffman sold 18,000 shares of the company's stock in a transaction dated Tuesday, June 30th. The shares were sold at an average price of $173.13, for a total transaction of $3,116,340.00. Following the completion of the sale, the chief executive officer directly owned 373,814 shares in the company, valued at $64,718,417.82. This represents a 4.59% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Michelle Reynolds sold 808 shares of Reddit stock in a transaction dated Wednesday, July 1st. The stock was sold at an average price of $200.00, for a total value of $161,600.00. Following the completion of the transaction, the chief accounting officer owned 15,060 shares in the company, valued at $3,012,000. The trade was a 5.09% decrease in their ownership of the stock. 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. Insiders sold 210,102 shares of company stock worth $36,375,252 in the last 90 days. Insiders own 28.48% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the business. The Manufacturers Life Insurance Company boosted its position in shares of Reddit by 8.7% in the second quarter. The Manufacturers Life Insurance Company now owns 8,167 shares of the company's stock valued at $1,418,000 after acquiring an additional 654 shares during the period. Sequoia Financial Advisors LLC raised its stake in Reddit by 23.0% during the 2nd quarter. Sequoia Financial Advisors LLC now owns 2,547 shares of the company's stock valued at $442,000 after purchasing an additional 476 shares during the last quarter. Bienville Capital Management LLC raised its stake in Reddit by 494.4% during the 2nd quarter. Bienville Capital Management LLC now owns 96,020 shares of the company's stock valued at $16,667,000 after purchasing an additional 79,867 shares during the last quarter. Concorde Asset Management LLC bought a new stake in Reddit in the 2nd quarter valued at $788,000. Finally, NewEdge Advisors LLC boosted its holdings in Reddit by 34.6% in the 2nd quarter. NewEdge Advisors LLC now owns 4,922 shares of the company's stock valued at $854,000 after purchasing an additional 1,265 shares during the period.

Reddit Company Profile

Reddit, Inc operates a global online platform where users participate in communities organized around shared interests, topics and discussions. Users can submit posts, links, images and videos, while community members can comment, vote and interact through publicly accessible forums known as subreddits.

The company generates revenue primarily through digital advertising and also offers premium memberships and other paid products. Reddit additionally provides data licensing and developer-related services that support the use of its platform content and technology.

Founded in 2005 by Steve Huffman, Alexis Ohanian and Aaron Swartz, Reddit serves users worldwide across a broad range of communities.

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