Reddit (RDDT) Shares Plunge 9.4% Amid Shift to Organic Marketing by SMBs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: stocktwits
- Stock Volatility: Reddit's shares dropped 9.4% on Thursday, marking the largest decline since October 1, although a slight rebound in after-hours trading indicates market concerns about its future performance.
- Shift in Ad Spending: RBC Capital Markets highlighted that small businesses are showing “mixed” feedback regarding ad spending, with more brands shifting towards building organic presence rather than relying solely on advertising, which could impact Reddit's revenue growth.
- Performance Expectations: Despite Reddit's projected 57% sales growth to $669 million in 2025 and a 71% increase in adjusted earnings to $1.45 per share, recent stock pullbacks and slowing traffic have raised investor concerns.
- Insider Selling Pressure: A wave of insider sales from executives, including the CEO, CTO, and chief legal officer, has pressured the stock, with investors looking forward to clearer performance insights when the fourth-quarter results are reported on February 5.
Analyst Views on RDDT
Wall Street analysts forecast RDDT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RDDT is 254.00 USD with a low forecast of 174.00 USD and a high forecast of 303.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
13 Buy
8 Hold
0 Sell
Moderate Buy
Current: 252.380
Low
174.00
Averages
254.00
High
303.00
Current: 252.380
Low
174.00
Averages
254.00
High
303.00
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.
