Traders Buy Large Volume of Call Options on Reddit (NYSE:RDDT)

Key Points

• Unusual options activity: Traders bought 61,137 Reddit call options on Thursday, about 35% above the stock’s average daily call volume. That signals elevated bullish speculation around RDDT.
• Shares jumped after strong results: Reddit stock rose 8.6% to $184.03, near its recent trading range, after the company previously reported quarterly earnings of $1.01 per share versus $0.62 expected and revenue growth of 69.1% year over year.
• Analysts remain constructive: Wall Street’s consensus rating on Reddit is Moderate Buy, with an average price target of $230.75. Several firms recently reiterated bullish views, including Loop Capital’s $260 target.

Reddit Inc. (NYSE:RDDT - Get Free Report) was the target of unusually large options trading activity on Thursday. Investors bought 61,137 call options on the company. This represents an increase of 35% compared to the average daily volume of 45,415 call options.

Reddit Trading Up 8.6%

NYSE RDDT traded up $14.54 on Thursday, hitting $184.03. 5,258,023 shares of the company's stock traded hands, compared to its average volume of 5,338,203. The firm's 50-day moving average price is $151.50 and its two-hundred day moving average price is $177.46. The firm has a market capitalization of $35.43 billion, a PE ratio of 52.49 and a beta of 1.91. Reddit has a 1-year low of $110.85 and a 1-year high of $282.95.

Reddit (NYSE:RDDT - Get Free Report) last announced its quarterly 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. The company had revenue of $663.41 million during the quarter, compared to analysts' expectations of $607.74 million. Reddit had a return on equity of 25.48% and a net margin of 28.60%.Reddit's quarterly revenue was up 69.1% on a year-over-year basis. During the same period last year, the business earned $0.13 earnings per share. On average, research analysts anticipate that Reddit will post 4.83 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Reddit news, CEO Steve Ladd Huffman sold 18,000 shares of the business's stock in a transaction dated Tuesday, May 5th. The shares were sold at an average price of $171.80, for a total value of $3,092,400.00. Following the completion of the transaction, the chief executive officer directly owned 411,195 shares in the company, valued at approximately $70,643,301. The trade was a 4.19% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Christopher Brian Slowe sold 15,500 shares of the business's stock in a transaction dated Wednesday, April 8th. The stock was sold at an average price of $150.67, for a total transaction of $2,335,385.00. Following the completion of the transaction, the chief technology officer owned 38,413 shares of the company's stock, valued at $5,787,686.71. This represents a 28.75% 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. Over the last ninety days, insiders sold 259,999 shares of company stock worth $39,812,508. 28.48% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the stock. Huntington National Bank lifted its holdings in Reddit by 25.6% during the third quarter. Huntington National Bank now owns 270 shares of the company's stock valued at $62,000 after purchasing an additional 55 shares in the last quarter. Institute for Wealth Management LLC. lifted its holdings in Reddit by 6.1% during the fourth 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 in the last quarter. Roxbury Financial LLC lifted its holdings in Reddit by 7.4% during the fourth quarter. Roxbury Financial LLC now owns 929 shares of the company's stock valued at $214,000 after purchasing an additional 64 shares in the last quarter. Florida Financial Advisors LLC lifted its holdings in Reddit by 6.7% during the fourth 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 in the last quarter. Finally, Diversified Trust Co lifted its holdings in Reddit by 2.1% during the first quarter. Diversified Trust Co now owns 3,271 shares of the company's stock valued at $440,000 after purchasing an additional 68 shares in the last quarter.

Wall Street Analyst Weigh In

A number of research analysts have recently weighed in on RDDT shares. Citigroup reissued a "market outperform" rating on shares of Reddit in a report on Tuesday, May 26th. Loop Capital reissued a "buy" rating and issued a $260.00 price objective on shares of Reddit in a report on Thursday. Zacks Research raised Reddit from a "hold" rating to a "strong-buy" rating in a report on Tuesday, May 5th. Weiss Ratings reissued a "hold (c)" rating on shares of Reddit in a report on Friday, May 8th. Finally, Cantor Fitzgerald lifted their price objective on shares of Reddit from $170.00 to $180.00 and gave the company a "neutral" rating in a research note on Friday, May 1st. One investment analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and eleven have assigned a Hold rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $230.75.

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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