Reddit (NYSE:RDDT) Shares Gap Down – Here’s What Happened

Reddit Inc. (NYSE:RDDT) gapped down before the market opened on Wednesday . The stock had previously closed at $185.84, but opened at $172.90. Reddit shares last traded at $170.2640, with a volume of 2,320,629 shares.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: DA Davidson reaffirmed its buy rating on Reddit and set a $200 price target, implying upside from current levels. Benzinga
• Neutral Sentiment: Wall Street expects Reddit to report earnings growth in next week’s results, but Zacks noted the stock does not currently have the ideal setup for a likely earnings beat. Zacks
• Neutral Sentiment: Some coverage framed the recent pullback as either a buying opportunity or a valuation risk, reflecting debate over whether the stock’s premium is justified after its strong run. Yahoo Finance
• Negative Sentiment: Reports that Reddit may rethink its $60 million Google AI deal have raised concerns that a renewal delay or dispute could weaken a key licensing relationship. Yahoo Finance
• Negative Sentiment: Investors are also reacting to fears that Google’s AI summaries could reduce traffic to Reddit, which would pressure the platform’s advertising economics and near-term growth narrative. CNBC

Wall Street Analysts Forecast Growth

RDDT has been the topic of several recent research reports. The Goldman Sachs Group reissued a “neutral” rating and issued a $200.00 price objective on shares of Reddit in a research note on Friday, May 1st. Oppenheimer restated an “outperform” rating and issued a $225.00 target price on shares of Reddit in a research note on Friday, May 1st. Truist Financial set a $265.00 target price on shares of Reddit in a report on Friday, May 1st. Jefferies Financial Group set a $250.00 price target on shares of Reddit in a research note on Friday, July 10th. Finally, Wall Street Zen cut shares of Reddit from a “buy” rating to a “hold” rating in a report on Sunday, May 10th. Nineteen research analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $232.48.

Reddit Trading Down 0.9%

The firm has a 50 day moving average of $174.46 and a two-hundred day moving average of $167.68. The stock has a market capitalization of $32.49 billion, a PE ratio of 48.22 and a beta of 1.93.

Reddit (NYSE:RDDT) last announced its earnings results on Thursday, April 30th. The company reported $1.01 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.62 by $0.39. Reddit had a net margin of 28.60% and a return on equity of 25.48%. The company had revenue of $663.41 million during the quarter, compared to analysts’ expectations of $607.74 million. During the same quarter in the previous year, the business posted $0.13 earnings per share. The firm’s quarterly revenue was up 69.1% compared to the same quarter last year. Equities research analysts forecast that Reddit Inc. will post 4.85 EPS for the current year.

Insider Buying and Selling

In related news, CAO Michelle Marie Reynolds sold 808 shares of the stock in a transaction dated Wednesday, July 1st. The stock was sold at an average price of $200.00, for a total transaction of $161,600.00. Following the transaction, the chief accounting officer directly owned 15,060 shares in the company, valued at approximately $3,012,000. This represents a 5.09% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, 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 approximately $172,541,252.52. The trade was a 3.47% 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 ninety days, insiders have sold 169,141 shares of company stock worth $28,680,845. 28.48% of the stock is owned by company insiders.

Institutional Investors Weigh In On Reddit

Hedge funds have recently modified their holdings of the stock. LOM Asset Management Ltd purchased a new position in Reddit during the fourth quarter worth approximately $33,000. Sunbelt Securities Inc. boosted its holdings in shares of Reddit by 87.5% in the 1st quarter. Sunbelt Securities Inc. now owns 195 shares of the company’s stock valued at $26,000 after purchasing an additional 91 shares during the last quarter. Beacon Investment Advisory Services Inc. purchased a new stake in shares of Reddit during the 2nd quarter valued at $35,000. Summit Securities Group LLC purchased a new stake in shares of Reddit during the 4th quarter valued at $46,000. Finally, Sound Income Strategies LLC acquired a new stake in shares of Reddit during the 4th quarter worth $47,000.

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.