Reddit (NYSE:RDDT) Shares Gap Down - Time to Sell?

Key Points

• Reddit shares gapped down ahead of Wednesday’s open, falling from a prior close of $185.84 to an open of $172.90 and last trading near $170.26.
• Analyst sentiment remains mixed but still constructive overall: Reddit has an average rating of Moderate Buy with a consensus price target of $232.48, though some firms have recently downgraded or taken a more cautious stance.
• The company’s latest earnings beat expectations, with EPS of $1.01 versus $0.62 expected and revenue up 69.1% year over year to $663.41 million, even as insider selling has continued in recent months.

Reddit Inc. (NYSE:RDDT - Get Free Report)'s stock price gapped down before the market opened on Wednesday . The stock had previously closed at $185.84, but opened at $172.90. Reddit shares last traded at $170.2640, with a volume of 2,320,629 shares trading hands.

Wall Street Analyst Weigh In

RDDT has been the topic of several analyst reports. Loop Capital reissued a "buy" rating and issued a $260.00 target price on shares of Reddit in a report on Thursday, June 4th. Zacks Research downgraded Reddit from a "strong-buy" rating to a "hold" rating in a report on Wednesday, June 3rd. Needham & Company LLC reaffirmed a "buy" rating and issued a $300.00 price target on shares of Reddit in a research report on Wednesday, June 24th. DA Davidson reiterated a "buy" rating and issued a $200.00 price target on shares of Reddit in a research note on Friday, May 1st. Finally, Wells Fargo & Company increased their price objective on shares of Reddit from $176.00 to $187.00 and gave the company an "equal weight" rating in a research report on Tuesday, July 7th. Nineteen research analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company's stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $232.48.

Reddit Stock Performance

The firm has a market capitalization of $32.24 billion, a P/E ratio of 47.84 and a beta of 1.93. The firm has a 50-day moving average of $173.90 and a 200-day moving average of $168.62.

Reddit (NYSE:RDDT - Get Free Report) last posted its earnings results on Thursday, April 30th. The company reported $1.01 EPS for the quarter, topping analysts' consensus estimates of $0.62 by $0.39. Reddit had a return on equity of 25.48% and a net margin of 28.60%.The business had revenue of $663.41 million during the quarter, compared to analyst estimates of $607.74 million. During the same quarter last year, the company earned $0.13 EPS. The company's quarterly revenue was up 69.1% compared to the same quarter last year. On average, research analysts forecast that Reddit Inc. will post 4.85 EPS for the current fiscal year.

Insider Activity at Reddit

In related news, CEO Steve Ladd Huffman sold 18,000 shares of Reddit stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $173.13, for a total value 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 approximately $64,718,417.82. This trade represents a 4.59% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed 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 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 sale, the chief accounting officer owned 15,060 shares of the company's stock, valued at $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. Insiders have sold 169,141 shares of company stock valued at $28,680,845 over the last ninety days. Insiders own 28.48% of the company's stock.

Institutional Trading of Reddit

A number of large investors have recently made changes to their positions in RDDT. Evansbrook LLC increased its stake in Reddit by 2.2% during the first quarter. Evansbrook LLC now owns 2,736 shares of the company's stock worth $368,000 after acquiring an additional 59 shares during the last quarter. Institute for Wealth Management LLC. lifted its stake in shares of Reddit by 6.1% in the 4th quarter. Institute for Wealth Management LLC. now owns 1,071 shares of the company's stock valued at $246,000 after purchasing an additional 62 shares during the last quarter. Florida Financial Advisors LLC lifted its stake in shares of Reddit by 6.7% in the 4th quarter. Florida Financial Advisors LLC now owns 1,087 shares of the company's stock valued at $250,000 after purchasing an additional 68 shares during the last quarter. Diversified Trust Co lifted its stake in shares of Reddit by 2.1% in the 1st quarter. Diversified Trust Co now owns 3,271 shares of the company's stock valued at $440,000 after purchasing an additional 68 shares during the last quarter. Finally, Versant Capital Management Inc boosted its holdings in shares of Reddit by 31.1% in the 2nd quarter. Versant Capital Management Inc now owns 291 shares of the company's stock worth $51,000 after purchasing an additional 69 shares during the period.

About Reddit

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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