Reddit (NYSE:RDDT) Sees Large Volume Increase Following Earnings Beat

Key Points

• Reddit reported earnings of $0.45 EPS for the quarter, significantly exceeding analyst expectations of $0.20 EPS, and saw a 77.9% year-over-year increase in revenue, bringing it to $499.63 million.
• The company's stock experienced a surge in trading volume, with approximately 6.97 million shares traded after the earnings announcement, reflecting a significant interest from investors.
• Several analysts have recently upgraded their ratings on Reddit, with an overall consensus rating of "Moderate Buy" and a price target averaging $158.79.

Reddit Inc. (NYSE:RDDT - Get Free Report) shares saw unusually-strong trading volume on Friday after the company announced better than expected quarterly earnings. Approximately 6,973,631 shares traded hands during mid-day trading, a decline of 10% from the previous session's volume of 7,748,206 shares.The stock last traded at $186.61 and had previously closed at $160.59.

The company reported $0.45 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.20 by $0.25. Reddit had a net margin of 8.07% and a return on equity of 5.69%. The company had revenue of $499.63 million during the quarter, compared to the consensus estimate of $424.07 million. During the same period in the previous year, the firm earned ($0.06) earnings per share. Reddit's revenue for the quarter was up 77.9% on a year-over-year basis.

Analyst Upgrades and Downgrades

Several equities research analysts have issued reports on the stock. Guggenheim reiterated a "buy" rating and set a $165.00 price objective on shares of Reddit in a research note on Tuesday, June 24th. Roth Mkm boosted their price objective on shares of Reddit from $120.00 to $130.00 and gave the stock a "neutral" rating in a research note on Friday, May 2nd. Morgan Stanley boosted their price objective on shares of Reddit from $170.00 to $230.00 and gave the stock an "overweight" rating in a research note on Friday. Wall Street Zen upgraded shares of Reddit from a "hold" rating to a "buy" rating in a research note on Saturday, June 14th. Finally, Seaport Res Ptn raised shares of Reddit from a "hold" rating to a "strong-buy" rating in a research note on Monday, May 5th. One analyst has rated the stock with a sell rating, nine have assigned a hold rating, thirteen have given a buy rating and two have given a strong buy rating to the company's stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $158.79.

Insider Transactions at Reddit

In other news, CAO Michelle Marie Reynolds sold 3,500 shares of Reddit stock in a transaction that occurred on Wednesday, June 25th. The shares were sold at an average price of $150.64, for a total value of $527,240.00. Following the transaction, the chief accounting officer owned 37,868 shares of the company's stock, valued at $5,704,435.52. This trade represents a 8.46% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, COO Jennifer L. Wong sold 33,334 shares of Reddit stock in a transaction that occurred on Wednesday, July 16th. The shares were sold at an average price of $142.06, for a total transaction of $4,735,428.04. Following the completion of the transaction, the chief operating officer directly owned 1,428,007 shares in the company, valued at approximately $202,862,674.42. This represents a 2.28% decrease in their position. The disclosure for this sale can be found here. Over the last three months, insiders sold 506,809 shares of company stock valued at $61,884,325. Insiders own 34.25% of the company's stock.

Hedge Funds Weigh In On Reddit

Institutional investors and hedge funds have recently bought and sold shares of the stock. Financial Perspectives Inc acquired a new position in Reddit during the 2nd quarter worth about $34,000. CWM LLC lifted its position in Reddit by 100.0% during the 1st quarter. CWM LLC now owns 256 shares of the company's stock worth $27,000 after buying an additional 128 shares in the last quarter. Fourth Dimension Wealth LLC acquired a new position in Reddit during the 4th quarter worth about $49,000. Chelsea Counsel Co. acquired a new stake in shares of Reddit in the 4th quarter valued at approximately $49,000. Finally, Stone House Investment Management LLC acquired a new stake in shares of Reddit in the 1st quarter valued at approximately $31,000.

Reddit Stock Performance

The firm has a market capitalization of $34.68 billion, a price-to-earnings ratio of 316.44, a P/E/G ratio of 3.81 and a beta of 2.33. The business's 50-day moving average is $135.22 and its two-hundred day moving average is $138.51.

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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