Reddit (NYSE:RDDT) Upgraded to "Buy" at Wall Street Zen

Key Points

• Wall Street Zen upgraded Reddit to “Buy” from “Hold,” while the broader analyst consensus remains “Moderate Buy” with an average price target of $223.16.
• Reddit reported strong quarterly results, including $1.25 in EPS versus $0.95 expected and revenue of $804.91 million, up 61% year over year.
• Despite the earnings beat, shares opened at $140.67 after a 21% decline, as investors remained concerned about volatile search referrals, slower U.S. user growth and limited new AI licensing deals.

Reddit (NYSE:RDDT - Get Free Report) was upgraded by equities research analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a note issued to investors on Saturday.

Several other equities analysts have also weighed in on the stock. Sanford C. Bernstein reiterated a "market perform" rating and issued a $180.00 target price on shares of Reddit in a report on Friday. Wells Fargo & Company cut their price target on shares of Reddit from $187.00 to $142.00 and set an "equal weight" rating for the company in a report on Friday. Loop Capital reaffirmed a "buy" rating and set a $260.00 price target on shares of Reddit in a research report on Thursday, June 4th. Rothschild & Co Redburn set a $110.00 price objective on Reddit in a report on Monday, April 27th. Finally, JPMorgan Chase & Co. lowered their price objective on Reddit from $200.00 to $185.00 and set a "neutral" rating for the company in a research report on Friday. Two research analysts have rated the stock with a Strong Buy rating, twenty have assigned a Buy rating and eleven have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $223.16.

Reddit Stock Down 21.0%

NYSE RDDT opened at $140.67 on Friday. Reddit has a 52 week low of $119.27 and a 52 week high of $282.95. The business's fifty day simple moving average is $176.72 and its 200-day simple moving average is $164.92. The firm has a market cap of $27.08 billion, a PE ratio of 32.71 and a beta of 1.93.

Reddit (NYSE:RDDT - Get Free Report) last announced its quarterly earnings results on Thursday, July 30th. The company reported $1.25 earnings per share for the quarter, beating the consensus estimate of $0.95 by $0.30. Reddit had a net margin of 31.35% and a return on equity of 29.97%. The firm had revenue of $804.91 million for the quarter, compared to analysts' expectations of $731.00 million. During the same quarter in the previous year, the company posted $0.45 EPS. The company's revenue was up 61.0% compared to the same quarter last year. Research analysts expect that Reddit will post 4.85 EPS for the current year.

Insider Transactions at Reddit

In related news, CEO Steve Ladd Huffman sold 18,000 shares of Reddit stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $178.26, for a total value of $3,208,680.00. Following the completion of the sale, the chief executive officer owned 373,814 shares in the company, valued at approximately $66,636,083.64. This trade represents a 4.59% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Michelle Marie Reynolds sold 808 shares of the business's stock in a transaction that occurred 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 directly owned 15,060 shares in the company, valued at approximately $3,012,000. The trade was a 5.09% 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 three months, insiders have sold 169,141 shares of company stock worth $28,680,845. 28.48% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Reddit

A number of institutional investors have recently modified their holdings of the company. Sunbelt Securities Inc. lifted its stake in Reddit by 87.5% during the 1st quarter. Sunbelt Securities Inc. now owns 195 shares of the company's stock worth $26,000 after acquiring an additional 91 shares in the last quarter. Ascentis Independent Advisors acquired a new position in Reddit in the 1st quarter valued at about $30,000. LOM Asset Management Ltd acquired a new position in Reddit in the 4th quarter valued at about $33,000. EverSource Wealth Advisors LLC increased its stake in Reddit by 48.1% during the second quarter. EverSource Wealth Advisors LLC now owns 197 shares of the company's stock worth $34,000 after purchasing an additional 64 shares during the period. Finally, Beacon Investment Advisory Services Inc. purchased a new stake in Reddit during the second quarter worth about $35,000.

More Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Reddit reported second-quarter revenue of approximately $805 million, up 61% year over year, while earnings of $1.25 per share exceeded analysts’ estimates. Advertising demand, higher pricing and user growth supported stronger monetization. Reddit crushes revenue and earnings estimates, issues strong guidance
• Positive Sentiment: Management forecast third-quarter revenue of $860 million to $870 million, above Wall Street’s approximately $830 million expectation. AI-powered advertising tools, product upgrades and continued ad growth are expected to support momentum. Reddit expects revenue above estimates as AI tools attract advertisers
• Positive Sentiment: Analyst sentiment remains mixed but includes bullish views: Truist raised its price target to $275 and maintained a buy rating, while Wedbush kept an outperform rating with a $221 target. KeyCorp also upgraded Reddit to “strong buy.” Reddit analyst actions
• Neutral Sentiment: Reddit is testing a “video Reddit” experience that could let users watch videos and listen to posts in the background, potentially increasing engagement and creating new advertising opportunities over time. Reddit is testing a new way to watch and listen to its viral posts
• Negative Sentiment: The primary selloff trigger was management’s warning that search referrals have become “choppy” or volatile. Investors fear Google’s AI-generated search summaries and other AI search tools could reduce traffic to Reddit, weakening future user growth, engagement and advertising monetization. Reddit Stock Plunges on Choppy Search Referrals Warning
• Negative Sentiment: Investors were also disappointed by slower U.S. daily-user growth and the lack of announced new AI licensing deals, raising questions about Reddit’s longer-term traffic outlook. JPMorgan and Cantor Fitzgerald responded by lowering their price targets to $185 and $170, respectively, while assigning neutral ratings. Reddit earnings: why are investors concerned despite solid headline numbers

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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