Reddit (NYSE:RDDT) Trading Down 4.1% – Time to Sell?

Reddit Inc. (NYSE:RDDT)’s stock price fell 4.1% during trading on Wednesday . The company traded as low as $190.80 and last traded at $194.8980. 480,315 shares traded hands during mid-day trading, a decline of 91% from the average daily volume of 5,099,776 shares. The stock had previously closed at $203.27.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Wedbush initiated coverage on Reddit with an Outperform rating and a $250 price target, implying meaningful upside from recent levels and highlighting confidence in Reddit’s ad business and AI/licensing opportunities. Article Title
• Positive Sentiment: Another report said Reddit could be 47% undervalued based on AI and advertising growth potential, reinforcing the view that Wall Street still sees room for expansion. Article Title
• Positive Sentiment: Jefferies said Reddit is likely to beat second-quarter revenue and EBITDA estimates, citing strong ad checks and improving user growth ahead of earnings. Article Title
• Neutral Sentiment: Additional media coverage and analyst commentary have put Reddit in the spotlight, which may be increasing trading volatility without changing the underlying fundamentals. Article Title
• Negative Sentiment: Some market commentary focused on why the shares fell more than the broader market, indicating investors remain sensitive to valuation after the stock’s recent gains. Article Title

Analysts Set New Price Targets

A number of brokerages recently weighed in on RDDT. Loop Capital reissued a “buy” rating and set a $260.00 target price on shares of Reddit in a research note on Thursday, June 4th. Oppenheimer reaffirmed an “outperform” rating and set a $225.00 price target on shares of Reddit in a research report on Friday, May 1st. Zacks Research downgraded Reddit from a “strong-buy” rating to a “hold” rating in a report on Wednesday, June 3rd. Raymond James Financial set a $180.00 price objective on Reddit and gave the stock a “market perform” rating in a research report on Friday, May 1st. Finally, Truist Financial set a $265.00 price objective on Reddit in a research note on Friday, May 1st. Nineteen investment analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $231.79.

Reddit Stock Performance

The firm’s 50 day moving average price is $172.26 and its two-hundred day moving average price is $169.66. The company has a market cap of $35.62 billion, a P/E ratio of 52.86 and a beta of 1.93.

Reddit (NYSE:RDDT) last issued its earnings results on Thursday, April 30th. The company reported $1.01 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.62 by $0.39. The business had revenue of $663.41 million for the quarter, compared to analyst estimates of $607.74 million. Reddit had a net margin of 28.60% and a return on equity of 25.48%. Reddit’s revenue was up 69.1% on a year-over-year basis. During the same period in the prior year, the firm earned $0.13 earnings per share. As a group, analysts forecast that Reddit Inc. will post 4.83 EPS for the current fiscal year.

Insider Activity

In other news, COO Jennifer L. Wong sold 39,167 shares of the firm’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $158.52, for a total value of $6,208,752.84. Following the completion of the sale, the chief operating officer directly owned 1,088,451 shares in the company, valued at $172,541,252.52. This trade represents a 3.47% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Michelle Marie Reynolds sold 808 shares of the business’s stock in a transaction dated 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 directly owned 15,060 shares of the company’s stock, valued at $3,012,000. The trade was a 5.09% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 169,141 shares of company stock worth $28,680,845. Company insiders own 28.48% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in RDDT. Bay Rivers Group acquired a new stake in Reddit in the second quarter valued at approximately $685,000. Allied Private Wealth LLC acquired a new position in shares of Reddit during the second quarter worth approximately $174,000. Arista Wealth Management LLC bought a new position in shares of Reddit in the 2nd quarter worth $347,000. Beacon Investment Advisory Services Inc. bought a new position in shares of Reddit in the 2nd quarter worth $35,000. Finally, PensionDanmark Pensionsforsikringsaktieselskab grew its position in Reddit by 102.3% in the 2nd quarter. PensionDanmark Pensionsforsikringsaktieselskab now owns 19,120 shares of the company’s stock valued at $3,319,000 after purchasing an additional 9,670 shares during the period.

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.