Reddit (NYSE:RDDT) Lowered to "Hold" Rating by Zacks Research

Key Points

• Zacks Research downgraded Reddit (NYSE:RDDT) from a "strong-buy" rating to a "hold" rating, indicating a more cautious outlook on the stock.
• Despite this downgrade, several other brokerages, including Morgan Stanley and Guggenheim, have raised their price targets for Reddit, with price objectives ranging from $145.00 to $290.00.
• Reddit reported a significant 77.9% increase in quarterly revenue year-over-year, with an earnings per share (EPS) of $0.45, beating analyst expectations.

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

Several other brokerages have also weighed in on RDDT. Morgan Stanley upped their price objective on shares of Reddit from $170.00 to $230.00 and gave the company an "overweight" rating in a report on Friday, August 1st. Roth Capital upped their price target on Reddit from $130.00 to $145.00 and gave the stock a "neutral" rating in a research note on Monday, July 21st. Guggenheim increased 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. Raymond James Financial restated a "strong-buy" rating and set a $225.00 price objective (up previously from $175.00) on shares of Reddit in a report on Friday, August 1st. Finally, Piper Sandler upped their target price on Reddit from $210.00 to $290.00 and gave the stock an "overweight" rating in a research report on Thursday, September 18th. Two equities research analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating, ten have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $201.58.

Reddit Stock Down 11.8%

Shares of RDDT stock opened at $202.77 on Tuesday. The company has a market cap of $37.95 billion, a price-to-earnings ratio of 184.33, a price-to-earnings-growth ratio of 3.62 and a beta of 2.24. Reddit has a 52 week low of $64.90 and a 52 week high of $282.95. The firm has a 50 day moving average of $222.56 and a 200-day moving average of $155.04.

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

Insider Transactions at Reddit

In related news, COO Jennifer L. Wong sold 30,741 shares of the business's stock in a transaction dated Monday, September 22nd. The shares were sold at an average price of $257.28, for a total transaction of $7,909,044.48. Following the transaction, the chief operating officer directly owned 1,295,968 shares in the company, valued at approximately $333,426,647.04. The trade was a 2.32% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CFO Andrew Vollero sold 30,000 shares of the company's stock in a transaction dated Tuesday, September 2nd. The stock was sold at an average price of $218.09, for a total transaction of $6,542,700.00. Following the completion of the sale, the chief financial officer directly owned 284,168 shares of the company's stock, valued at $61,974,199.12. The trade was a 9.55% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 379,834 shares of company stock worth $82,388,799. 34.25% of the stock is owned by insiders.

Hedge Funds Weigh In On Reddit

Several institutional investors have recently modified their holdings of the business. Mackenzie Financial Corp bought a new stake in Reddit during the fourth quarter worth $316,000. Wealth Enhancement Advisory Services LLC purchased a new stake in shares of Reddit during the 4th quarter valued at $2,208,000. Rhumbline Advisers increased its position in shares of Reddit by 202.7% during the 1st quarter. Rhumbline Advisers now owns 13,682 shares of the company's stock valued at $1,435,000 after purchasing an additional 9,162 shares during the last quarter. Boltwood Capital Management bought a new stake in shares of Reddit during the 1st quarter worth $1,256,000. Finally, SeaCrest Wealth Management LLC boosted its holdings in shares of Reddit by 16.7% in the 1st quarter. SeaCrest Wealth Management LLC now owns 2,475 shares of the company's stock worth $260,000 after buying an additional 354 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.

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