ETFs to Ride Meme Mania Resurgence: Will the Rally Last?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 14 2024
0mins
Source: Benzinga
Return of "Roaring Kitty" Sparks Meme Stock Rally:
- Keith Gill, known as "Roaring Kitty," returned to social media, sparking a meme stock rally reminiscent of 2021.
- His tweet with a popular meme image attracted significant attention and engagement.
Meme Stocks Surge:
- GameStop Corp. shares doubled after the post, adding $6 billion in market value in under an hour.
- Other meme stocks like AMC Entertainment, Koss Corp, Hertz Global, and Reddit also surged significantly.
ETFs Targeting Meme Stocks:
- Investors can tap into the meme mania resurgence using ETFs like VanEck Social Sentiment ETF (BUZZ) and SoFi Social 50 ETF (SFYF).
- These ETFs offer exposure to U.S. stocks with positive investor sentiment and widely held companies on SoFi Invest.
Risks and Considerations:
- Meme stocks are driven by social sentiment rather than fundamentals, making them speculative and risky investments.
- Short squeezes by small traders can lead to sharp price rallies but also result in heavy losses when excitement fades.
GameStop's Financial Outlook:
- GameStop faced challenges like job cuts and revenue declines, with negative earnings estimates for the coming years.
- Despite recent rallies, the stock has a Zacks Rank #5 (Strong Sell), indicating caution for investors.
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Analyst Views on RDDT
Wall Street analysts forecast RDDT stock price to rise
22 Analyst Rating
14 Buy
8 Hold
0 Sell
Moderate Buy
Current: 197.760
Low
207.00
Averages
260.00
High
325.00
Current: 197.760
Low
207.00
Averages
260.00
High
325.00
About RDDT
Reddit, Inc. operates a social platform, Reddit. Reddit is a community of communities. It is built on shared interests, passion, and trust and is home to open and authentic conversations on the Internet. Reddit is a global, digital city where anyone in the world can join a community to learn from one another, engage in authentic conversations, explore passions, research new hobbies, exchange goods and services, create new communities and experiences, share a few laughs, and find belonging. Reddit has thousands of communities, endless conversations, and authentic human connections. Communities on Reddit are organized based on specific interests and are called subreddits. Reddit offers real-time access to evolving and dynamic topics, such as sports, movies, news, fashion, and the latest trends. On Reddit, users can submit, vote, and comment on the topics they care about. It has approximately 100,000+ active communities and approximately 101+ million daily active visitors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Six Strategies for Effective Retirement Planning in America
- Retirement Funding Support: In 2026, individuals can gift up to $19,000 annually without triggering gift tax, and couples can combine to gift $38,000, providing flexible financial support options for children looking to assist their parents and ensuring better economic security in retirement.
- Delay Social Security Claims: By subsidizing parents' living expenses, they can delay claiming Social Security until age 70, increasing their monthly benefits by 8% each year, resulting in a 24% lifetime income boost from age 67 to 70, making this strategy often more financially advantageous than a lump-sum gift.
- Protect Existing Savings: According to the FBI's 2025 report, Americans aged 60 and older reported losses of $7.7 billion due to financial scams, a 59% increase, thus helping parents complete Trusted Contact Forms to prevent suspicious transactions is crucial for safeguarding their funds.
- Tap Into Unclaimed Government Benefits: Utilizing the National Council on Aging's BenefitsCheckUp site can help parents identify financial assistance programs they may qualify for, freeing up hundreds of dollars monthly to better manage their savings and promote growth.
See More
Analysis of Market Performance of Three Stocks
- Strong Growth in Healthcare Stock: Alignment Healthcare (ALHC) has achieved an impressive 45.4% annual revenue growth over the past two years, indicating its success in gaining market share, while its earnings per share have compounded at 28.5% annually, suggesting superior profitability compared to peers, making it an attractive option for investors.
- Potential Risks in Pharma Company: Collegium Pharmaceutical (COLL) has delivered a 23.8% return over the past month, but its smaller revenue base of $796.3 million and a 6.4 percentage point decline in adjusted operating margin highlight its disadvantages in achieving economies of scale, which could impact future profitability.
- Market Pressures on Outdoor Materials Company: Trex Company (TREX) has seen a 19.5% return in the past month; however, its sales have declined by 2.1% over the last two years, and its free cash flow margin has decreased by 8 percentage points, indicating challenges from market trends that investors should carefully assess.
- Caution for Investors: While ALHC shows strong growth potential, the fundamentals of COLL and TREX reveal underlying risks, suggesting that investors should consider the financial health and market conditions of these companies when making stock selections.
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Wendy's Stock Soars 50% Amid Meme Stock Frenzy
- Stock Surge: Wendy's stock surged by as much as 50% due to increased interest from Reddit traders, despite the company facing declining same-store sales and brand issues, highlighting the volatility driven by investor sentiment.
- Industry Competitors: While Wendy's struggles, other strong stocks in the restaurant sector, such as Toast, have shown a 26% year-over-year increase in annual recurring revenue (ARR) and are utilized in over 171,000 restaurant locations, indicating a robust competitive advantage.
- Profitability Growth: Toast's latest quarterly report reveals a 26% year-over-year ARR growth and strong profitability, with its stock price approximately 45% below its 52-week high, suggesting it could be an attractive investment opportunity.
- Starbucks Recovery: Under Brian Niccol's leadership, Starbucks has implemented the
See More
Wendy's Stock Soars 50% Amid Meme Stock Frenzy
- Significant Stock Volatility: Wendy's stock surged by up to 50% due to interest from Reddit traders, despite facing declining same-store sales and brand issues, indicating the risks associated with retail investors chasing short-term volatility.
- Strong Performance of Toast: In the latest quarter, Toast's annual recurring revenue grew by 26% year-over-year and demonstrated strong profitability, despite heightened concerns about AI disruption, as its usage in over 171,000 restaurants highlights its competitive moat.
- Successful Transformation at Starbucks: Under Brian Niccol's leadership, Starbucks has implemented the 'Back to Starbucks' initiative, significantly improving service efficiency, with a recent quarter showing a 32% year-over-year EPS growth and an expected comparable sales growth of at least 5%, indicating a recovery in growth momentum.
- Investment Strategy Advice: While chasing meme stocks like Wendy's may seem appealing, the volatility of short-term trading often leads to losses; investors are advised to focus on long-term opportunities with improving fundamentals for more stable returns.
See More
Investment Choices: Pinterest vs. Reddit
- Pinterest's Financial Performance: In FY 2025, Pinterest reported revenue of approximately $4.2 billion, reflecting a 15.8% increase year-over-year, with a net income of about $416.9 million and a net margin of nearly 9.9%, indicating sustained profitability despite facing multiple securities fraud class action lawsuits.
- Reddit's Rapid Growth: Reddit achieved revenue of around $2.2 billion in FY 2025, a significant 69.4% increase from the previous year, with a net income of approximately $529.7 million and a net margin of nearly 24.1%, marking a successful transition from prior losses to profitability, showcasing strong growth potential in advertising revenue.
- Risk Comparison: Pinterest faces revenue concentration risks heavily reliant on the retail and consumer goods sectors, while needing to effectively execute a restructuring plan to address competitive pressures; in contrast, Reddit's reliance on a small group of major advertisers poses instability risks if those relationships change, alongside regulatory pressures from global safety acts.
- Valuation Comparison: Pinterest's forward P/E ratio stands at 11.0x and P/S ratio at 3.3x, significantly lower than Reddit's 33.8x and 14.6x, indicating a more attractive valuation despite its advertising business struggling to accelerate, while still maintaining a loyal user base and unique visual discovery platform.
See More
RDDT Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for the $170.00 put option is $61.05, and if an investor sells this contract, they commit to buying RDDT shares at $170.00, effectively lowering their cost basis to $108.95, which is approximately a 2% discount from the current price of $172.79, presenting an attractive investment alternative.
- Return Potential Analysis: Should the put option expire worthless, the premium would yield a 35.91% return on cash commitment, or an annualized yield of 14.58%, known as YieldBoost, highlighting the potential profitability of this strategy.
- Call Option Returns: The $210.00 call option has a current bid of $68.25, and if an investor buys RDDT shares at $172.79 and sells this contract, the total return could reach 61.03% if the stock is called away at the December 2028 expiration, indicating strong return potential.
- Risk Assessment: The $210.00 call option has a 31% chance of expiring worthless, allowing investors to retain both their shares and the premium collected, thereby enhancing the safety and profitability of the investment.
See More
Six Strategies for Effective Retirement Planning in America
- Retirement Funding Support: In 2026, individuals can gift up to $19,000 annually without triggering gift tax, and couples can combine to gift $38,000, providing flexible financial support options for children looking to assist their parents and ensuring better economic security in retirement.
- Delay Social Security Claims: By subsidizing parents' living expenses, they can delay claiming Social Security until age 70, increasing their monthly benefits by 8% each year, resulting in a 24% lifetime income boost from age 67 to 70, making this strategy often more financially advantageous than a lump-sum gift.
- Protect Existing Savings: According to the FBI's 2025 report, Americans aged 60 and older reported losses of $7.7 billion due to financial scams, a 59% increase, thus helping parents complete Trusted Contact Forms to prevent suspicious transactions is crucial for safeguarding their funds.
- Tap Into Unclaimed Government Benefits: Utilizing the National Council on Aging's BenefitsCheckUp site can help parents identify financial assistance programs they may qualify for, freeing up hundreds of dollars monthly to better manage their savings and promote growth.
See More
Analysis of Market Performance of Three Stocks
- Strong Growth in Healthcare Stock: Alignment Healthcare (ALHC) has achieved an impressive 45.4% annual revenue growth over the past two years, indicating its success in gaining market share, while its earnings per share have compounded at 28.5% annually, suggesting superior profitability compared to peers, making it an attractive option for investors.
- Potential Risks in Pharma Company: Collegium Pharmaceutical (COLL) has delivered a 23.8% return over the past month, but its smaller revenue base of $796.3 million and a 6.4 percentage point decline in adjusted operating margin highlight its disadvantages in achieving economies of scale, which could impact future profitability.
- Market Pressures on Outdoor Materials Company: Trex Company (TREX) has seen a 19.5% return in the past month; however, its sales have declined by 2.1% over the last two years, and its free cash flow margin has decreased by 8 percentage points, indicating challenges from market trends that investors should carefully assess.
- Caution for Investors: While ALHC shows strong growth potential, the fundamentals of COLL and TREX reveal underlying risks, suggesting that investors should consider the financial health and market conditions of these companies when making stock selections.
See More
Wendy's Stock Soars 50% Amid Meme Stock Frenzy
- Stock Surge: Wendy's stock surged by as much as 50% due to increased interest from Reddit traders, despite the company facing declining same-store sales and brand issues, highlighting the volatility driven by investor sentiment.
- Industry Competitors: While Wendy's struggles, other strong stocks in the restaurant sector, such as Toast, have shown a 26% year-over-year increase in annual recurring revenue (ARR) and are utilized in over 171,000 restaurant locations, indicating a robust competitive advantage.
- Profitability Growth: Toast's latest quarterly report reveals a 26% year-over-year ARR growth and strong profitability, with its stock price approximately 45% below its 52-week high, suggesting it could be an attractive investment opportunity.
- Starbucks Recovery: Under Brian Niccol's leadership, Starbucks has implemented the
See More
Wendy's Stock Soars 50% Amid Meme Stock Frenzy
- Significant Stock Volatility: Wendy's stock surged by up to 50% due to interest from Reddit traders, despite facing declining same-store sales and brand issues, indicating the risks associated with retail investors chasing short-term volatility.
- Strong Performance of Toast: In the latest quarter, Toast's annual recurring revenue grew by 26% year-over-year and demonstrated strong profitability, despite heightened concerns about AI disruption, as its usage in over 171,000 restaurants highlights its competitive moat.
- Successful Transformation at Starbucks: Under Brian Niccol's leadership, Starbucks has implemented the 'Back to Starbucks' initiative, significantly improving service efficiency, with a recent quarter showing a 32% year-over-year EPS growth and an expected comparable sales growth of at least 5%, indicating a recovery in growth momentum.
- Investment Strategy Advice: While chasing meme stocks like Wendy's may seem appealing, the volatility of short-term trading often leads to losses; investors are advised to focus on long-term opportunities with improving fundamentals for more stable returns.
See More
Investment Choices: Pinterest vs. Reddit
- Pinterest's Financial Performance: In FY 2025, Pinterest reported revenue of approximately $4.2 billion, reflecting a 15.8% increase year-over-year, with a net income of about $416.9 million and a net margin of nearly 9.9%, indicating sustained profitability despite facing multiple securities fraud class action lawsuits.
- Reddit's Rapid Growth: Reddit achieved revenue of around $2.2 billion in FY 2025, a significant 69.4% increase from the previous year, with a net income of approximately $529.7 million and a net margin of nearly 24.1%, marking a successful transition from prior losses to profitability, showcasing strong growth potential in advertising revenue.
- Risk Comparison: Pinterest faces revenue concentration risks heavily reliant on the retail and consumer goods sectors, while needing to effectively execute a restructuring plan to address competitive pressures; in contrast, Reddit's reliance on a small group of major advertisers poses instability risks if those relationships change, alongside regulatory pressures from global safety acts.
- Valuation Comparison: Pinterest's forward P/E ratio stands at 11.0x and P/S ratio at 3.3x, significantly lower than Reddit's 33.8x and 14.6x, indicating a more attractive valuation despite its advertising business struggling to accelerate, while still maintaining a loyal user base and unique visual discovery platform.
See More
RDDT Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for the $170.00 put option is $61.05, and if an investor sells this contract, they commit to buying RDDT shares at $170.00, effectively lowering their cost basis to $108.95, which is approximately a 2% discount from the current price of $172.79, presenting an attractive investment alternative.
- Return Potential Analysis: Should the put option expire worthless, the premium would yield a 35.91% return on cash commitment, or an annualized yield of 14.58%, known as YieldBoost, highlighting the potential profitability of this strategy.
- Call Option Returns: The $210.00 call option has a current bid of $68.25, and if an investor buys RDDT shares at $172.79 and sells this contract, the total return could reach 61.03% if the stock is called away at the December 2028 expiration, indicating strong return potential.
- Risk Assessment: The $210.00 call option has a 31% chance of expiring worthless, allowing investors to retain both their shares and the premium collected, thereby enhancing the safety and profitability of the investment.
See More
