Reddit (NYSE:RDDT) Downgraded by Citizens Jmp to “Market Perform”

Citizens Jmp cut shares of Reddit (NYSE:RDDT) from a market outperform rating to a market perform rating in a research note released on Friday morning, Marketbeat Ratings reports.

Several other research firms have also recently commented on RDDT. Wall Street Zen cut Reddit from a “buy” rating to a “hold” rating in a report on Sunday, August 9th. Jefferies Financial Group set a $250.00 price objective on shares of Reddit in a research note on Friday, July 10th. Roth Capital reiterated a “neutral” rating and set a $145.00 target price on shares of Reddit in a research report on Monday, August 3rd. Wedbush cut their price target on shares of Reddit from $250.00 to $221.00 and set an “outperform” rating for the company in a research note on Friday, July 31st. Finally, DA Davidson decreased their price objective on Reddit from $200.00 to $185.00 and set a “buy” rating on the stock in a report on Friday, September 18th. Two research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating and twelve have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $197.61.

Reddit Stock Down 29.2%

Shares of RDDT stock opened at $91.74 on Friday. Reddit has a 12 month low of $89.28 and a 12 month high of $263.50. The firm has a market cap of $17.65 billion, a PE ratio of 18.72, a price-to-earnings-growth ratio of 0.60 and a beta of 2.05. The stock has a 50 day moving average of $150.37 and a 200-day moving average of $160.26.

Reddit (NYSE:RDDT) last announced its earnings results on Thursday, October 29th. The company reported $1.40 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.33 by $0.07. The business had revenue of $894.96 million for the quarter, compared to analyst estimates of $874.91 million. Reddit had a net margin of 32.10% and a return on equity of 31.67%. Reddit’s revenue was up 53.0% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.80 earnings per share. As a group, equities analysts predict that Reddit will post 5.28 EPS for the current fiscal year.

Insiders Place Their Bets

In related news, Director Robert A. Sauerberg sold 5,128 shares of Reddit stock in a transaction dated Tuesday, August 25th. The stock was 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 $4,331,753.04. The trade was a 15.92% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Steve Huffman sold 18,000 shares of the company’s stock in a transaction dated Friday, August 14th. The stock was sold at an average price of $178.16, for a total transaction of $3,206,880.00. Following the transaction, the chief executive officer owned 373,814 shares in the company, valued at approximately $66,598,702.24. This trade represents a 4.59% 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. Over the last quarter, insiders have sold 306,052 shares of company stock valued at $49,754,523. 28.48% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in RDDT. Rakuten Investment Management Inc. bought a new position in Reddit during the third quarter worth about $3,611,000. Provenance Wealth Advisors LLC bought a new position in Reddit in the third quarter valued at approximately $775,000. Integrity Alliance LLC. boosted its holdings in shares of Reddit by 4.3% in the third quarter. Integrity Alliance LLC. now owns 2,536 shares of the company’s stock valued at $361,000 after buying an additional 104 shares during the period. Oregon Public Employees Retirement Fund bought a new stake in shares of Reddit during the third quarter worth $2,564,000. Finally, Aware Super Pty Ltd as trustee of Aware Super boosted its stake in Reddit by 203.8% in the 3rd quarter. Aware Super Pty Ltd as trustee of Aware Super now owns 53,091 shares of the company’s stock worth $7,562,000 after purchasing an additional 35,614 shares during the period.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Reddit reported third-quarter revenue of approximately $895 million, up 53% year over year, and earnings of $1.40 per share, exceeding analyst expectations. Advertising revenue increased 54%, while improved monetization and first-week app retention—up more than 50% year over year—provided evidence of continued platform engagement. Reddit Q3 Earnings Beat on Ad Growth and Strong Monetization
• Positive Sentiment: Several analysts retained constructive views despite reducing their targets. Citigroup, Truist Financial, B. Riley and Wedbush still rated RDDT Buy or Outperform, with targets above the current trading level, suggesting potential long-term recovery if user engagement and monetization improve. Reddit Analysts Slash Their Forecasts Following Q3 Earnings
• Neutral Sentiment: Reddit plans to test a primarily logged-in experience in international markets to reduce data scraping, strengthen data protection and limit its reliance on search referrals. Management is also responding to the growing impact of Google AI search features on website traffic. Reddit Search Traffic Declines and Visitor Sign-In Plans
• Negative Sentiment: Management’s outlook was the main catalyst for the selloff. Search traffic was described as meaningfully lower, and daily active unique visitors could decline by a low double-digit percentage in the fourth quarter if Google referrals continue weakening. The logged-in-only strategy could further reduce casual and logged-out users before improving engagement or monetization.
• Negative Sentiment: Analysts broadly cut price targets, including Wells Fargo to $110, Cantor Fitzgerald to $120 and Bernstein to $120; Oppenheimer and Citizens JMP downgraded the stock to market perform. Investors are concerned that international user growth is less valuable than U.S. growth, while Meta and Google remain powerful advertising competitors.
• Negative Sentiment: Levi & Korsinsky and Block & Leviton announced investigations into whether Reddit adequately disclosed the risks associated with its logged-in-only transition and search-traffic exposure, adding legal and reputational uncertainty. Reddit Investigation Notice

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.