Reddit (NYSE:RDDT) Raised to “Strong-Buy” at Zacks Research

Reddit (NYSE:RDDT) was upgraded by analysts at Zacks Research from a “hold” rating to a “strong-buy” rating in a research report issued on Tuesday, Zacks reports.

A number of other research analysts also recently issued reports on the company. B. Riley Financial upped their price objective on Reddit from $250.00 to $270.00 and gave the company a “buy” rating in a research note on Friday, July 31st. Wells Fargo & Company lowered their target price on Reddit from $187.00 to $142.00 and set an “equal weight” rating on the stock in a research note on Friday, July 31st. Wedbush cut their price target on shares of Reddit from $250.00 to $221.00 and set an “outperform” rating on the stock in a report on Friday, July 31st. Wall Street Zen lowered shares of Reddit from a “buy” rating to a “hold” rating in a research report on Sunday, August 9th. Finally, Oppenheimer reduced their price target on shares of Reddit from $225.00 to $200.00 and set an “outperform” rating for the company in a research report on Friday, July 31st. Three research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating and nine have given a Hold rating to the company. According to data from MarketBeat.com, Reddit has an average rating of “Moderate Buy” and an average price target of $219.29.

Reddit Stock Down 1.3%

RDDT stock opened at $134.72 on Tuesday. The firm has a market cap of $25.92 billion, a PE ratio of 31.33, a P/E/G ratio of 0.67 and a beta of 2.05. The business has a 50 day moving average of $151.97 and a 200-day moving average of $161.59. Reddit has a 12-month low of $119.27 and a 12-month high of $263.50.

Reddit (NYSE:RDDT) last issued its quarterly earnings results on Thursday, July 30th. The company reported $1.25 EPS for the quarter, topping analysts’ consensus estimates of $0.95 by $0.30. Reddit had a return on equity of 29.02% and a net margin of 31.35%. The business had revenue of $804.91 million for the quarter, compared to analyst estimates of $731.00 million. During the same period last year, the company posted $0.45 earnings per share. Reddit’s quarterly revenue was up 61.0% compared to the same quarter last year. On average, research analysts expect that Reddit will post 5.27 earnings per share for the current year.

Insider Buying and Selling

In other Reddit news, CEO Steve Huffman sold 17,308 shares of Reddit stock in a transaction dated 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 completion of the transaction, the chief executive officer owned 336,432 shares of the company’s stock, valued at $53,348,022.24. The trade was a 4.89% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Robert A. Sauerberg sold 5,128 shares of the company’s stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total value of $820,069.76. Following the sale, the director owned 27,087 shares in the company, valued at approximately $4,331,753.04. This represents a 15.92% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 306,052 shares of company stock valued at $49,754,523. Corporate insiders own 28.48% of the company’s stock.

Institutional Investors Weigh In On Reddit

A number of institutional investors and hedge funds have recently modified their holdings of the company. Sumitomo Mitsui Trust Group Inc. increased its position in shares of Reddit by 1.9% during the 3rd quarter. Sumitomo Mitsui Trust Group Inc. now owns 245,252 shares of the company’s stock valued at $34,934,000 after purchasing an additional 4,659 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. purchased a new position in shares of Reddit during the 3rd quarter valued at about $5,212,000. Profund Advisors LLC purchased a new position in shares of Reddit during the 3rd quarter valued at about $1,353,000. ProShare Advisors LLC bought a new stake in Reddit in the 3rd quarter worth approximately $3,880,000. Finally, Vise Technologies Inc. lifted its position in Reddit by 16.3% in the 3rd quarter. Vise Technologies Inc. now owns 3,073 shares of the company’s stock worth $438,000 after buying an additional 430 shares during the last quarter.

Reddit News Summary

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

Reddit Company Profile

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.