Wall Street Zen Downgrades Reddit (NYSE:RDDT) to Hold

Key Points

• Reddit has been downgraded from a "buy" rating to a "hold" rating by Wall Street Zen, reflecting a shift in analyst sentiment towards the stock.
• Despite the downgrade, several other research firms, including Wolfe Research and Morgan Stanley, have issued mixed ratings, with some maintaining "buy" or "outperform" ratings and setting price targets ranging from $150 to $230.
• Reddit recently reported quarterly earnings of $0.45 per share, significantly beating estimates, with revenue of $499.63 million, indicating strong year-over-year growth of 77.9%.

Reddit (NYSE:RDDT - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report released on Saturday.

RDDT has been the subject of several other research reports. Sanford C. Bernstein increased their price objective on shares of Reddit from $130.00 to $150.00 and gave the company a "market perform" rating in a research note on Tuesday, July 22nd. Needham & Company LLC lifted their price target on Reddit from $165.00 to $215.00 and gave the stock a "buy" rating in a report on Friday, August 1st. Bank of America boosted their price objective on Reddit from $130.00 to $150.00 and gave the stock a "neutral" rating in a research report on Wednesday, July 30th. JMP Securities lifted their target price on Reddit from $180.00 to $225.00 and gave the stock a "market outperform" rating in a research note on Friday, August 1st. Finally, Loop Capital cut their price target on shares of Reddit from $210.00 to $200.00 and set a "buy" rating on the stock in a report on Thursday, June 12th. Two equities research analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating, nine have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, Reddit currently has a consensus rating of "Moderate Buy" and a consensus target price of $175.38.

Reddit Stock Up 0.4%

NYSE RDDT traded up $0.82 on Friday, reaching $220.88. The company had a trading volume of 6,559,531 shares, compared to its average volume of 7,785,056. The company's fifty day moving average is $181.62 and its 200 day moving average is $141.96. Reddit has a 52-week low of $55.25 and a 52-week high of $253.14. The stock has a market capitalization of $41.34 billion, a P/E ratio of 201.07, a P/E/G ratio of 3.57 and a beta of 2.40.

Reddit (NYSE:RDDT - Get Free Report) last posted its earnings results on Thursday, July 31st. The company reported $0.45 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.25. The firm had revenue of $499.63 million during the quarter, compared to analyst estimates of $424.07 million. Reddit had a net margin of 12.97% and a return on equity of 9.93%. The business's revenue was up 77.9% compared to the same quarter last year. During the same quarter in the prior year, the business posted ($0.06) EPS. Reddit has set its Q3 2025 guidance at EPS. On average, research analysts expect that Reddit will post 1.12 EPS for the current year.

Insider Buying and Selling at Reddit

In other Reddit news, CEO Steve Ladd Huffman sold 14,000 shares of the stock in a transaction on Friday, August 15th. The stock was sold at an average price of $244.70, for a total transaction of $3,425,800.00. Following the sale, the chief executive officer owned 531,485 shares in the company, valued at $130,054,379.50. This represents a 2.57% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Benjamin Seong Lee sold 6,426 shares of Reddit stock in a transaction on Friday, August 22nd. The shares were sold at an average price of $220.28, for a total value of $1,415,519.28. Following the completion of the transaction, the insider owned 83,445 shares of the company's stock, valued at approximately $18,381,264.60. This trade represents a 7.15% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 468,777 shares of company stock worth $78,225,996. Company insiders own 34.25% of the company's stock.

Institutional Investors Weigh In On Reddit

A number of institutional investors and hedge funds have recently modified their holdings of the company. Alliancebernstein L.P. raised its stake in Reddit by 103.0% in the first quarter. Alliancebernstein L.P. now owns 5,659,990 shares of the company's stock valued at $593,733,000 after purchasing an additional 2,871,232 shares in the last quarter. Norges Bank bought a new position in Reddit in the second quarter valued at $294,254,000. Whale Rock Capital Management LLC bought a new position in Reddit in the fourth quarter valued at $204,054,000. Amundi raised its position in Reddit by 2,060.5% during the second quarter. Amundi now owns 1,307,231 shares of the company's stock valued at $208,294,000 after purchasing an additional 1,246,725 shares in the last quarter. Finally, State Street Corp lifted its stake in Reddit by 138.5% during the second quarter. State Street Corp now owns 2,030,139 shares of the company's stock worth $305,678,000 after purchasing an additional 1,178,890 shares during the last quarter.

About Reddit

Reddit, Inc operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.