Wedbush Has Lowered Expectations for Reddit (NYSE:RDDT) Stock Price

Reddit (NYSE:RDDT) had its target price dropped by investment analysts at Wedbush from $250.00 to $221.00 in a research report issued to clients and investors on Friday,Benzinga reports. The brokerage currently has an “outperform” rating on the stock. Wedbush’s price target suggests a potential upside of 48.22% from the stock’s current price.

A number of other research firms also recently commented on RDDT. Citigroup reiterated a “market outperform” rating on shares of Reddit in a report on Friday. Truist Financial set a $265.00 price target on shares of Reddit in a research note on Friday, May 1st. UBS Group restated a “buy” rating on shares of Reddit in a research report on Friday. Loop Capital reaffirmed a “buy” rating and issued a $260.00 target price on shares of Reddit in a research report on Thursday, June 4th. Finally, Wall Street Zen lowered shares of Reddit from a “buy” rating to a “hold” rating in a research note on Sunday, May 10th. Two investment analysts have rated the stock with a Strong Buy rating, twenty have issued a Buy rating and eleven have issued a Hold rating to the company’s stock. Based on data from MarketBeat, Reddit presently has an average rating of “Moderate Buy” and a consensus target price of $228.65.

Reddit Trading Down 16.3%

Shares of RDDT opened at $149.10 on Friday. The company’s 50-day moving average price is $176.74 and its 200 day moving average price is $165.09. Reddit has a 12-month low of $119.27 and a 12-month high of $282.95. The firm has a market cap of $28.70 billion, a P/E ratio of 42.12 and a beta of 1.93.

Reddit (NYSE:RDDT) last announced its quarterly earnings results on Thursday, July 30th. The company reported $1.25 earnings per share for the quarter, beating analysts’ consensus estimates of $0.95 by $0.30. Reddit had a net margin of 28.60% and a return on equity of 25.48%. The business had revenue of $804.91 million during the quarter, compared to analysts’ expectations of $731.00 million. During the same period last year, the business earned $0.45 earnings per share. The business’s revenue for the quarter was up 61.0% on a year-over-year basis. Equities research analysts forecast that Reddit will post 4.85 earnings per share for the current year.

Insider Activity

In related news, CAO Michelle Marie Reynolds sold 808 shares of the company’s stock in a transaction 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 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 through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jennifer L. Wong sold 39,167 shares of the company’s stock in a transaction on Monday, May 18th. The shares were sold at an average price of $158.52, for a total transaction of $6,208,752.84. Following the completion of the sale, the chief operating officer owned 1,088,451 shares of the company’s stock, valued at approximately $172,541,252.52. This trade represents a 3.47% 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. Insiders have sold 169,141 shares of company stock valued at $28,680,845 in the last ninety days. 28.48% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Reddit

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Ahara Advisors LLC increased its position in Reddit by 42.8% in the 2nd quarter. Ahara Advisors LLC now owns 10,759 shares of the company’s stock valued at $1,868,000 after acquiring an additional 3,224 shares during the period. Udine Wealth Management Inc. acquired a new stake in Reddit during the 2nd quarter worth approximately $2,901,000. Bogart Wealth LLC lifted its position in Reddit by 8,400.0% during the 2nd quarter. Bogart Wealth LLC now owns 595 shares of the company’s stock worth $103,000 after acquiring an additional 588 shares during the period. a16z Perennial Management L.P. purchased a new position in shares of Reddit in the 2nd quarter valued at approximately $430,000. Finally, Sidoxia Capital Management LLC purchased a new position in shares of Reddit in the 2nd quarter valued at approximately $713,000.

Reddit News Roundup

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q2 results beat expectations. Reddit reported adjusted EPS of $1.25, versus the $0.95–$0.99 analyst consensus, while revenue rose 61% year over year to $804.9 million, well above the roughly $731 million estimate. Net income reached $253 million, supported by continued user growth and higher advertising revenue. Reddit crushes revenue and earnings estimates, issues strong guidance
• Positive Sentiment: Third-quarter guidance exceeded Wall Street forecasts. Reddit projected revenue of $860 million to $870 million, above the $829.7 million consensus estimate. Management also said AI-powered advertising tools are helping attract marketers and support commercial momentum. Reddit expects revenue above estimates as AI tools attract advertisers
• Positive Sentiment: Analyst sentiment improved. KeyCorp upgraded Reddit to “strong buy,” reflecting confidence in the company’s growth and momentum. Reddit upgraded by KeyCorp
• Neutral Sentiment: Management defended Reddit’s search value. CEO Steve Huffman said Google’s AI Overviews have not yet replaced the value of traditional search links, but the company acknowledged that search-engine referrals have become “choppy.”
• Negative Sentiment: AI-related search disruption overshadowed the earnings beat. Investors are concerned that Google’s AI search features could reduce traffic referrals to Reddit and potentially weaken user growth, engagement, and advertising monetization. Reports also suggested Reddit could reconsider a Google partnership reportedly worth about $60 million annually if search traffic continues to deteriorate. Reddit’s strong quarter fails to lift shares as AI search concerns linger

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.