Reddit (NYSE:RDDT) Price Target Lowered to $221.00 at Wedbush

Key Points

• Wedbush lowered Reddit’s price target to $221 from $250 while maintaining an “outperform” rating, implying 48.22% potential upside from the reported $149.10 share price.
• Reddit reported a strong quarter, with EPS of $1.25 versus the $0.95 consensus and revenue of $804.9 million, up 61% year over year. The company also forecast third-quarter revenue of $860 million to $870 million, above analyst expectations.
• AI-driven search disruption remains a key risk: Investors worry that Google’s AI features could reduce referrals, engagement and advertising revenue, despite Reddit’s strong results and generally positive analyst sentiment.

Reddit (NYSE:RDDT - Get Free Report) had its target price cut by investment analysts at Wedbush from $250.00 to $221.00 in a research report issued to clients and investors on Friday,Benzinga reports. The firm presently has an "outperform" rating on the stock. Wedbush's target price would suggest a potential upside of 48.22% from the stock's current price.

Several other equities research analysts have also recently issued reports on the company. Needham & Company LLC reiterated a "buy" rating and issued a $300.00 price objective on shares of Reddit in a report on Wednesday, June 24th. KeyCorp started coverage on Reddit in a research note on Wednesday. They issued an "overweight" rating and a $225.00 price target on the stock. Citigroup reiterated a "market outperform" rating on shares of Reddit in a research report on Friday. DA Davidson restated a "buy" rating and issued a $200.00 price objective on shares of Reddit in a report on Thursday, July 23rd. Finally, Wells Fargo & Company set a $142.00 target price on shares of Reddit in a research note on Friday. Two analysts have rated the stock with a Strong Buy rating, twenty have issued a Buy rating and eleven have assigned a Hold rating to the company. According to MarketBeat, Reddit has an average rating of "Moderate Buy" and an average target price of $228.65.

Reddit Stock Performance

Shares of NYSE RDDT opened at $149.10 on Friday. The firm has a market cap of $28.70 billion, a PE ratio of 42.12 and a beta of 1.93. The firm has a fifty day moving average of $176.74 and a 200 day moving average of $165.09. Reddit has a one year low of $119.27 and a one year high of $282.95.

Reddit (NYSE:RDDT - Get Free Report) last posted 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. The company had revenue of $804.91 million during the quarter, compared to analysts' expectations of $731.00 million. Reddit had a net margin of 28.60% and a return on equity of 25.48%. The firm's revenue for the quarter was up 61.0% on a year-over-year basis. During the same period in the prior year, the business posted $0.45 earnings per share. On average, equities analysts predict that Reddit will post 4.85 EPS for the current fiscal year.

Insider Activity at Reddit

In other Reddit news, CEO Steve Ladd Huffman sold 18,000 shares of the business's stock in a transaction on Tuesday, June 30th. The stock was sold at an average price of $173.13, for a total transaction of $3,116,340.00. Following the transaction, the chief executive officer owned 373,814 shares of the company's stock, 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 filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Michelle Marie Reynolds sold 808 shares of the company's stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $200.00, for a total value of $161,600.00. Following the completion of the sale, the chief accounting officer owned 15,060 shares of the company's stock, valued at approximately $3,012,000. The trade was a 5.09% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 169,141 shares of company stock valued at $28,680,845. 28.48% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of RDDT. Ahara Advisors LLC grew its holdings in shares of Reddit by 42.8% in the second quarter. Ahara Advisors LLC now owns 10,759 shares of the company's stock valued at $1,868,000 after purchasing an additional 3,224 shares during the period. Udine Wealth Management Inc. acquired a new stake in Reddit during the second quarter worth about $2,901,000. Bogart Wealth LLC raised its stake in Reddit by 8,400.0% during the second quarter. Bogart Wealth LLC now owns 595 shares of the company's stock worth $103,000 after purchasing an additional 588 shares during the period. a16z Perennial Management L.P. purchased a new position in Reddit during the second quarter worth about $430,000. Finally, Sidoxia Capital Management LLC acquired a new position in Reddit in the 2nd quarter valued at about $713,000.

Key Headlines Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q2 results beat expectations. Reddit reported adjusted EPS of $1.25, versus the $0.95–$0.99 analyst consensus, while revenue rose 61% year over year to $804.9 million, well above the roughly $731 million estimate. Net income reached $253 million, supported by continued user growth and higher advertising revenue. Reddit crushes revenue and earnings estimates, issues strong guidance
• Positive Sentiment: Third-quarter guidance exceeded Wall Street forecasts. Reddit projected revenue of $860 million to $870 million, above the $829.7 million consensus estimate. Management also said AI-powered advertising tools are helping attract marketers and support commercial momentum. Reddit expects revenue above estimates as AI tools attract advertisers
• Positive Sentiment: Analyst sentiment improved. KeyCorp upgraded Reddit to “strong buy,” reflecting confidence in the company’s growth and momentum. Reddit upgraded by KeyCorp
• Neutral Sentiment: Management defended Reddit’s search value. CEO Steve Huffman said Google’s AI Overviews have not yet replaced the value of traditional search links, but the company acknowledged that search-engine referrals have become “choppy.”
• Negative Sentiment: AI-related search disruption overshadowed the earnings beat. Investors are concerned that Google’s AI search features could reduce traffic referrals to Reddit and potentially weaken user growth, engagement, and advertising monetization. Reports also suggested Reddit could reconsider a Google partnership reportedly worth about $60 million annually if search traffic continues to deteriorate. Reddit’s strong quarter fails to lift shares as AI search concerns linger

Reddit Company Profile

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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