Reddit (NYSE:RDDT) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Reddit gapped up in premarket trading after reporting $1.01 EPS versus $0.62 expected and revenue of $663.41 million (vs. $607.74M est.), with revenue up 69.1% YoY and shares opening at $165.51 versus a $147.23 close.
• Management credited AI‑driven ad products for stronger ad returns and guided Q2 revenue above consensus, fueling a premarket rally and upbeat investor sentiment.
• Wall Street sentiment is broadly positive (average rating "Moderate Buy" and average price target ~$229.86), while insiders have been active recently—one director bought shares and the CTO sold under a 10b5‑1 plan.

Reddit Inc. (NYSE:RDDT - Get Free Report) gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $147.23, but opened at $165.51. Reddit shares last traded at $158.8990, with a volume of 3,773,848 shares traded.

The company reported $1.01 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.62 by $0.39. The business had revenue of $663.41 million for the quarter, compared to analysts' expectations of $607.74 million. Reddit had a return on equity of 20.89% and a net margin of 24.05%.The business's revenue for the quarter was up 69.1% on a year-over-year basis. During the same quarter last year, the firm earned $0.13 EPS.

Trending Headlines about Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q1 results beat and strong guidance — Reddit posted a sizable beat on revenue and EPS, delivered a $204M profit, and guided Q2 revenue above consensus, supporting the rally. Reddit Reports First Quarter 2026 Results
• Positive Sentiment: AI-driven ad products cited as the growth engine — Company commentary and multiple reports point to stronger returns from AI advertising tools as the key driver of higher ad sales and the bullish revenue outlook. Reddit rallies as AI‑driven ad growth fuels strong revenue outlook
• Positive Sentiment: Market reaction in premarket/after-hours trading — Reports show shares jumped substantially in premarket trading after the prints and guidance, reflecting renewed investor enthusiasm. Reddit stock jumps 12%: can AI-driven ads spark stock revival?
• Positive Sentiment: Analyst support — Needham reaffirmed a Buy and set a $300 price target, signaling bullish analyst conviction that could reinforce momentum. Benzinga
• Neutral Sentiment: Product/engagement improvement — Weekly search usage is up ~30% YoY, showing product improvements that could help ad targeting and engagement over time. People are finally using Reddit's search
• Neutral Sentiment: Earnings call transcript and metric details available — The full transcript and metric breakdowns provide more color but contain no immediate surprises beyond management’s upbeat commentary. Reddit Q1 2026 Earnings Call Transcript
• Negative Sentiment: Mixed coverage on profitability detail — One outlet framed the quarter as an earnings “miss” offset by adjusted EBITDA and revenue strength; such mixed narratives can create short-term volatility despite the beat. Reddit stock climbs as revenue, adjusted EBITDA surge offsets earnings miss

Wall Street Analyst Weigh In

A number of research firms have recently weighed in on RDDT. DA Davidson reissued a "buy" rating and issued a $200.00 price objective on shares of Reddit in a research report on Friday. UBS Group set a $265.00 price objective on Reddit in a research report on Tuesday, January 13th. Roth Mkm raised their price objective on Reddit from $210.00 to $215.00 and gave the stock a "neutral" rating in a research report on Friday, January 30th. Jefferies Financial Group lowered their price objective on Reddit from $285.00 to $250.00 and set a "buy" rating for the company in a research report on Tuesday, March 10th. Finally, Wall Street Zen cut Reddit from a "buy" rating to a "hold" rating in a research report on Wednesday, April 8th. One equities research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating and ten have assigned a Hold rating to the stock. According to data from MarketBeat, Reddit currently has an average rating of "Moderate Buy" and an average price target of $229.86.

Insider Transactions at Reddit

In other news, Director Sarah E. Farrell purchased 10,500 shares of the stock in a transaction on Friday, March 13th. The stock was bought at an average price of $132.26 per share, with a total value of $1,388,730.00. Following the transaction, the director owned 61,000 shares in the company, valued at $8,067,860. The trade was a 20.79% increase in their position. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CTO Christopher Brian Slowe sold 15,500 shares of Reddit stock in a transaction dated Wednesday, April 8th. The stock was sold at an average price of $150.67, for a total value of $2,335,385.00. Following the sale, the chief technology officer directly owned 38,413 shares of the company's stock, valued at approximately $5,787,686.71. This represents a 28.75% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders purchased 61,000 shares of company stock worth $8,870,815 and sold 280,441 shares worth $40,873,759. 34.25% of the stock is owned by company insiders.

Institutional Trading of Reddit

A number of institutional investors and hedge funds have recently added to or reduced their stakes in RDDT. Raiffeisen Bank International AG acquired a new stake in Reddit during the 3rd quarter worth about $25,000. GW&K Investment Management LLC purchased a new position in shares of Reddit during the 3rd quarter valued at about $30,000. Ascentis Independent Advisors purchased a new position in shares of Reddit during the 1st quarter valued at about $30,000. Cornerstone Planning Group LLC raised its stake in shares of Reddit by 13,500.0% during the 3rd quarter. Cornerstone Planning Group LLC now owns 136 shares of the company's stock valued at $31,000 after buying an additional 135 shares during the last quarter. Finally, LOM Asset Management Ltd purchased a new position in shares of Reddit during the 4th quarter valued at about $33,000.

Reddit Stock Performance

The stock has a 50 day simple moving average of $144.12 and a two-hundred day simple moving average of $184.31. The firm has a market cap of $30.70 billion, a PE ratio of 61.04, a price-to-earnings-growth ratio of 1.07 and a beta of 2.40.

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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