Reddit (NYSE:RDDT) Shares Up 7.1% – Time to Buy?

Reddit Inc. (NYSE:RDDT)’s share price was up 7.1% during trading on Wednesday . The stock traded as high as $151.63 and last traded at $154.8550. 661,689 shares changed hands during mid-day trading, a decline of 88% from the average session volume of 5,477,578 shares. The stock had previously closed at $144.64.

Key Headlines Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Analysts at Baird argued that the market has already priced in the potential downside from Reddit’s two AI data-licensing agreements, which expire next year. The view helped support a recent rally by reducing concern that Google or other partners could fail to renew. Reddit Rallies 7% as Baird Says Renewal Risk Is Already Priced In
• Positive Sentiment: A bullish investment analysis cited Reddit’s rapid earnings growth, expanding margins, rising advertising revenue, stronger international and small-business channels, and improved conversion from Reddit Max. It estimated fair value of $230 and said AI data licensing could provide additional long-term upside. Reddit: Rapid Earnings Growth With Room For An AI Expansion
• Positive Sentiment: Reddit was identified as a top-ranked momentum stock by Zacks. Separately, an AI-focused stock analysis described Reddit’s human-generated content as a potentially valuable source of training data for large language models and said the chart could be positioned for an upside breakout. Reddit Is a Top-Ranked Momentum Stock
• Neutral Sentiment: Reddit’s latest quarterly results provide a fundamental backdrop: revenue rose 61% year over year to $804.9 million, while earnings per share of $1.25 exceeded the $0.95 consensus estimate. However, analysts have also cited recent search-traffic volatility and valuation concerns as reasons for the stock’s pullback. Should You Hold on to RDDT Stock Despite Its Dip
• Negative Sentiment: CEO Steve Huffman sold 18,000 shares worth approximately $2.66 million at an average price of $148.02. The transaction was made under a pre-arranged Rule 10b5-1 plan, limiting its signaling value, but it still adds an overhang after several similar sales.

Wall Street Analysts Forecast Growth

Several analysts recently commented on RDDT shares. Raymond James Financial restated a “strong-buy” rating and set a $205.00 price target on shares of Reddit in a research report on Monday, August 17th. Wedbush decreased their price objective on shares of Reddit from $250.00 to $221.00 and set an “outperform” rating for the company in a research report on Friday, July 31st. Citigroup reissued a “market outperform” rating on shares of Reddit in a research note on Monday, August 24th. Needham & Company LLC restated a “buy” rating and set a $300.00 target price on shares of Reddit in a research report on Wednesday, June 24th. Finally, Zacks Research lowered Reddit from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, August 25th. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and eleven have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $221.10.

Reddit Stock Down 1.5%

The stock’s 50-day simple moving average is $170.83 and its two-hundred day simple moving average is $158.83. The company has a market capitalization of $29.95 billion, a price-to-earnings ratio of 36.20, a PEG ratio of 0.73 and a beta of 2.02.

Reddit (NYSE:RDDT) last announced its 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 business had revenue of $804.91 million for the quarter, compared to analyst estimates 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% compared to the same quarter last year. During the same quarter last year, the business earned $0.45 earnings per share. On average, sell-side analysts forecast that Reddit Inc. will post 5.27 EPS for the current year.

Insider Transactions at Reddit

In other news, CEO Steve Huffman sold 18,000 shares of Reddit stock in a transaction that occurred on Monday, August 31st. The stock was sold at an average price of $148.02, for a total value of $2,664,360.00. Following the sale, the chief executive officer directly owned 336,432 shares of the company’s stock, valued at $49,798,664.64. The trade was a 5.08% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at 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 stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total value of $820,069.76. Following the completion of the transaction, the director directly owned 27,087 shares of the company’s stock, valued at approximately $4,331,753.04. This represents a 15.92% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 210,102 shares of company stock valued at $36,375,252. 28.48% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Reddit

Hedge funds have recently modified their holdings of the business. California State Teachers Retirement System boosted its position in Reddit by 19,702.8% during the second quarter. California State Teachers Retirement System now owns 30,076,727 shares of the company’s stock worth $5,220,718,000 after acquiring an additional 29,924,846 shares during the last quarter. Capital World Investors purchased a new position in Reddit in the 4th quarter worth approximately $1,293,258,000. State Street Corp boosted its holdings in shares of 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 grew its position in shares of Reddit by 4.7% in the fourth quarter. Geode Capital Management LLC now owns 2,382,712 shares of the company’s stock valued at $546,789,000 after purchasing an additional 106,821 shares in the last quarter. Finally, Morgan Stanley grew its position in shares of Reddit by 11.4% in the fourth quarter. Morgan Stanley now owns 2,372,443 shares of the company’s stock valued at $545,354,000 after purchasing an additional 242,709 shares in the last quarter.

About Reddit

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.