Reddit (NYSE:RDDT) Stock Rating Raised to Strong-Buy at Zacks Research

Zacks Research upgraded shares of Reddit (NYSE:RDDT) from a hold rating to a strong-buy rating in a research note issued to investors on Tuesday,Zacks reports.

Other analysts have also recently issued research reports about the stock. UBS Group reissued a “buy” rating on shares of Reddit in a research note on Friday, July 31st. Cantor Fitzgerald lowered their target price on Reddit from $200.00 to $170.00 and set a “neutral” rating for the company in a research report on Friday, July 31st. Citigroup reaffirmed a “market outperform” rating on shares of Reddit in a report on Wednesday, October 14th. Morgan Stanley reduced their price target on Reddit from $240.00 to $210.00 and set an “overweight” rating on the stock in a research report on Friday, August 21st. Finally, BNP Paribas Exane initiated coverage on Reddit in a research report on Friday, September 18th. They issued a “neutral” rating and a $180.00 price target on the stock. Three research analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and nine have given a Hold rating to the company’s stock. According to data from MarketBeat.com, Reddit presently has an average rating of “Moderate Buy” and an average target price of $219.29.

Reddit Price Performance

RDDT opened at $134.72 on Tuesday. Reddit has a fifty-two week low of $119.27 and a fifty-two week high of $263.50. The company’s 50 day moving average price is $151.97 and its two-hundred day moving average price is $161.59. The firm has a market capitalization of $25.92 billion, a price-to-earnings ratio of 31.33, a PEG ratio of 0.67 and a beta of 2.05.

Reddit (NYSE:RDDT) last released its quarterly earnings results on Thursday, July 30th. The company reported $1.25 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.95 by $0.30. The firm had revenue of $804.91 million during the quarter, compared to the consensus estimate of $731.00 million. Reddit had a net margin of 31.35% and a return on equity of 29.02%. The company’s revenue for the quarter was up 61.0% on a year-over-year basis. During the same quarter last year, the firm earned $0.45 earnings per share. As a group, equities research analysts predict that Reddit will post 5.27 EPS for the current year.

Insider Activity

In other news, Director Robert Sauerberg sold 5,128 shares of the stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total transaction of $820,069.76. Following the completion of the sale, the director directly owned 27,087 shares in the company, valued at $4,331,753.04. This represents a 15.92% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Steve Huffman sold 17,308 shares of Reddit stock in a transaction on Tuesday, October 13th. The stock was sold at an average price of $158.57, for a total transaction of $2,744,529.56. Following the transaction, the chief executive officer directly owned 336,432 shares of the company’s stock, valued at $53,348,022.24. This represents a 4.89% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 306,052 shares of company stock valued at $49,754,523. 28.48% of the stock is currently owned by insiders.

Institutional Trading of Reddit

A number of institutional investors have recently bought and sold shares of the company. Sunbelt Securities Inc. lifted its stake in shares of Reddit by 87.5% in the first quarter. Sunbelt Securities Inc. now owns 195 shares of the company’s stock valued at $26,000 after buying an additional 91 shares in the last quarter. EverSource Wealth Advisors LLC increased its position in shares of 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 acquiring an additional 64 shares in the last quarter. Beacon Investment Advisory Services Inc. bought a new stake in shares of Reddit during the second quarter worth about $35,000. Ascentis Independent Advisors bought a new stake in shares of Reddit during the first quarter worth about $30,000. Finally, Hager Investment Management Services LLC raised its holdings in shares of Reddit by 522.2% in the 2nd quarter. Hager Investment Management Services LLC now owns 280 shares of the company’s stock worth $49,000 after acquiring an additional 235 shares during the last quarter.

Reddit News Roundup

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Analysts expect Reddit to extend its record of quarterly earnings beats since its initial public offering. Strong advertising growth, artificial-intelligence initiatives and the potential for another revenue beat could help revive investor confidence. Reddit Q3 Earnings Preview
• Positive Sentiment: Truist Financial reiterated a Buy rating, indicating that the firm sees potential in Reddit’s advertising business and longer-term growth opportunities. Truist Buy Rating
• Neutral Sentiment: Reddit introduced a “For You” feed alongside its “Following” feed, adopting a recommendation-based format popularized by TikTok. The change could improve user engagement and ad inventory, although its financial impact is not yet clear. Reddit Introduces For You Feed
• Negative Sentiment: Recent selling reflects fears of slower growth ahead of the earnings release. Investors are likely to focus on user trends, advertising momentum and management’s outlook to determine whether Reddit’s valuation can be sustained. Reddit Slower-Growth Fears
• Negative Sentiment: Despite strong prior profitability and revenue growth, analysts caution that Reddit’s premium valuation, rising costs and nearly 40% recent decline leave limited room for an earnings or guidance disappointment. Reddit Q3 Buy Sell or Hold Analysis

About Reddit

Reddit, Inc operates a global online platform where users participate in communities organized around shared interests, topics and activities. Members can submit text posts, links, images and videos, as well as comment on and vote on content. The platform includes thousands of communities, commonly known as subreddits, covering subjects such as news, entertainment, technology, sports, finance and lifestyle.

Reddit generates revenue primarily through digital advertising, offering advertisers access to audiences based on community interests and user engagement.