Reddit's (RDDT) Buy Rating Reiterated at DA Davidson

Key Points

• DA Davidson reiterated its “buy” rating on Reddit and kept a $200 price target, implying about 15% upside from the prior close.
• Other analysts remain mixed, but the overall Wall Street view is still Moderate Buy, with a consensus target price of $232.48 and 19 Buy ratings versus 12 Hold ratings.
• Reddit shares rose 1.7% to $173.34, while the company’s latest earnings beat expectations with $1.01 EPS on $663.4 million in revenue, up 69.1% year over year.

Reddit (NYSE:RDDT - Get Free Report)'s stock had its "buy" rating reaffirmed by equities research analysts at DA Davidson in a report issued on Thursday,Benzinga reports. They currently have a $200.00 price target on the stock. DA Davidson's target price indicates a potential upside of 15.38% from the stock's previous close.

Other analysts have also issued research reports about the stock. Wedbush restated an "outperform" rating on shares of Reddit in a research report on Thursday. Zacks Research lowered shares of Reddit from a "strong-buy" rating to a "hold" rating in a research note on Wednesday, June 3rd. The Goldman Sachs Group restated a "neutral" rating and set a $200.00 target price on shares of Reddit in a research report on Friday, May 1st. Bank of America cut their price target on Reddit from $205.00 to $175.00 and set a "neutral" rating for the company in a research note on Thursday, April 2nd. Finally, Cantor Fitzgerald reaffirmed a "neutral" rating and issued a $200.00 price target on shares of Reddit in a report on Monday. Nineteen analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus target price of $232.48.

Reddit Trading Up 1.7%

Reddit stock traded up $2.96 during mid-day trading on Thursday, hitting $173.34. The company had a trading volume of 2,432,548 shares, compared to its average volume of 5,087,623. Reddit has a 12-month low of $119.27 and a 12-month high of $282.95. The company's fifty day moving average is $174.21 and its 200-day moving average is $168.20. The company has a market capitalization of $33.37 billion, a price-to-earnings ratio of 49.57 and a beta of 1.93.

Reddit (NYSE:RDDT - Get Free Report) last posted its earnings results on Thursday, April 30th. The company reported $1.01 earnings per share for the quarter, beating the consensus estimate of $0.62 by $0.39. Reddit had a net margin of 28.60% and a return on equity of 25.48%. The firm had revenue of $663.41 million during the quarter, compared to analyst estimates of $607.74 million. During the same period in the previous year, the firm earned $0.13 EPS. The business's quarterly revenue was up 69.1% on a year-over-year basis. As a group, sell-side analysts expect that Reddit will post 4.85 EPS for the current fiscal year.

Insider Activity

In related news, CAO Michelle Marie Reynolds sold 808 shares of the company's stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $200.00, for a total transaction of $161,600.00. Following the completion of the transaction, the chief accounting officer owned 15,060 shares in the company, valued at $3,012,000. This represents a 5.09% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jennifer L. Wong sold 39,166 shares of the firm's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $176.94, for a total transaction of $6,930,032.04. Following the completion of the transaction, the chief operating officer directly owned 1,050,339 shares in the company, valued at $185,846,982.66. This represents a 3.59% 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 a total of 169,141 shares of company stock worth $28,680,845 over the last 90 days. 28.48% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Reddit

Hedge funds have recently made changes to their positions in the company. Vanguard Group Inc. boosted its stake in shares of Reddit by 8.9% in the fourth quarter. Vanguard Group Inc. now owns 13,322,048 shares of the company's stock worth $3,062,339,000 after acquiring an additional 1,083,540 shares during the last quarter. Capital World Investors purchased a new position in Reddit in the 4th quarter valued at $1,293,258,000. State Street Corp boosted its stake in Reddit by 6.0% during the 4th quarter. State Street Corp now owns 2,631,332 shares of the company's stock worth $604,864,000 after purchasing an additional 149,401 shares during the last quarter. Geode Capital Management LLC boosted its stake in Reddit by 4.7% during the 4th quarter. Geode Capital Management LLC now owns 2,382,712 shares of the company's stock worth $546,789,000 after purchasing an additional 106,821 shares during the last quarter. Finally, Morgan Stanley grew its holdings in shares of Reddit by 11.4% during the fourth quarter. Morgan Stanley now owns 2,372,443 shares of the company's stock worth $545,354,000 after buying an additional 242,709 shares in the last quarter.

More Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Some analysts still see meaningful upside in Reddit shares, with recent price targets above current levels suggesting the market may be overreacting to the Google headline risk.
• Neutral Sentiment: Reddit is set to report second-quarter results on July 30, which is keeping traders focused on the company’s growth, traffic, and monetization trends ahead of the print. Article Title
• Neutral Sentiment: One market view is that the recent pullback could create an attractive entry point if Reddit can preserve its licensing economics and show continued user growth.
• Negative Sentiment: Reports that Reddit may block or reconsider Google’s access to its content have revived concerns that AI-generated answers could reduce referral traffic to Reddit, pressuring advertising revenue. Article Title
• Negative Sentiment: The stock also fell more than the broader market in the latest session, with momentum weakening after it slipped below key moving averages, signaling traders are becoming more cautious. Article Title

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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