Reddit Reports 70% Revenue Growth in Q4 Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy RDDT?
Source: Fool
- Revenue Surge: Reddit's Q4 revenue soared 70% year-over-year to $726 million, indicating strong performance in the digital advertising market and likely attracting more advertisers.
- Significant User Growth: Daily active unique users increased by 19% to 121.4 million, reflecting enhanced user engagement and stickiness, which will contribute to future ad revenue growth.
- Net Income Explosion: The company reported a net income of $252 million, showcasing successful cost management and revenue growth, thereby strengthening its competitive position in the market.
- Share Buyback Program: Reddit announced a $1 billion share buyback program aimed at enhancing shareholder value and boosting market confidence, despite short-term stock fluctuations, long-term investors should consider its growth potential.
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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 260.00 USD with a low forecast of 207.00 USD and a high forecast of 325.00 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.
22 Analyst Rating
14 Buy
8 Hold
0 Sell
Moderate Buy
Current: 139.830
Low
207.00
Averages
260.00
High
325.00
Current: 139.830
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.
Reddit Reports 70% Revenue Growth in Q4 Earnings
- Revenue Surge: Reddit's Q4 revenue soared 70% year-over-year to $726 million, indicating strong performance in the digital advertising market and likely attracting more advertisers.
- Significant User Growth: Daily active unique users increased by 19% to 121.4 million, reflecting enhanced user engagement and stickiness, which will contribute to future ad revenue growth.
- Net Income Explosion: The company reported a net income of $252 million, showcasing successful cost management and revenue growth, thereby strengthening its competitive position in the market.
- Share Buyback Program: Reddit announced a $1 billion share buyback program aimed at enhancing shareholder value and boosting market confidence, despite short-term stock fluctuations, long-term investors should consider its growth potential.
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- Earnings Beat: The company achieved earnings per share of $1.24, significantly surpassing the analyst estimate of $0.94, demonstrating a notable improvement in profitability that may attract more investor interest.
- Stock Buyback Program: Reddit announced a $1 billion stock repurchase program with no set expiration date, aimed at enhancing shareholder value and boosting market confidence in the company's future prospects.
- Market Volatility Reaction: Despite an initial 9% surge in stock price on Friday morning, shares reversed course to decline nearly 5%, reflecting market caution towards high-volatility stocks, which could influence short-term investor decisions.
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Reddit Reports 70% Revenue Growth in Q4 Earnings
- Revenue Surge: Reddit's Q4 revenue soared 70% year-over-year to $726 million, indicating strong performance in the digital advertising market and likely attracting more advertisers.
- Significant User Growth: Daily active unique users increased by 19% to 121.4 million, reflecting enhanced user engagement and stickiness, which will contribute to future ad revenue growth.
- Net Income Explosion: The company reported a net income of $252 million, showcasing successful cost management and revenue growth, thereby strengthening its competitive position in the market.
- Share Buyback Program: Reddit announced a $1 billion share buyback program aimed at enhancing shareholder value and boosting market confidence, despite short-term stock fluctuations, long-term investors should consider its growth potential.
See More
Czech Government Considers Social Media Ban for Children Under 15
- Government Support: Czech Prime Minister Andrej Babis expressed support for restricting social media access for children under 15, citing expert warnings about the detrimental effects on mental health and development, highlighting the government's commitment to child protection.
- Legislative Proposal Potential: Deputy Prime Minister Karel Havlicek indicated that the government is seriously considering legislative action, with a proposal potentially introduced this year if the cabinet agrees, signaling a significant policy shift regarding children's social media use in the Czech Republic.
- European Trend: The discussions in the Czech Republic align with trends in other European countries, as Spain, Greece, Britain, and France also explore stricter rules on teenage social media use, reflecting a reassessment of the impact of digital platforms on children's well-being.
- Tech Giants Push Back: Following Australia's precedent of banning social media access for users under 16, tech giants like Elon Musk's X complied swiftly, indicating strong industry pushback against youth social media bans and the challenges of implementing such regulations.
See More
Worst Performing Large-Cap Stocks Last Week
- Stellantis Loss Warning: Stellantis (NYSE:STLA) plummeted 26.24% this week after the company warned of a full-year net loss, significantly eroding investor confidence and potentially impacting future financing capabilities.
- Gartner Earnings Miss: Gartner (NYSE:IT) fell 25.41% this week following the release of its fourth-quarter financial results and a downward revision of its FY26 guidance, with analysts' pessimistic outlook likely to exert further pressure on the stock.
- Reddit Stock Decline: Reddit (NYSE:RDDT) dropped 23.10% this week as multiple analysts lowered their price forecasts, reflecting market concerns over its profitability and potentially hindering its financing and expansion plans.
- Analyst Downgrades: Several analysts adjusted their price targets downward for these companies, indicating a widespread bearish sentiment regarding their future performance, which may lead investors to reassess their portfolios.
See More
Giannis Antetokounmpo Becomes Shareholder of Kalshi
- Investor Status: Milwaukee Bucks forward Giannis Antetokounmpo announced his investment in New York-based prediction market platform Kalshi, becoming the first NBA player to directly invest in the company, marking a new trend of athlete engagement in fintech.
- Investment Terms: Under the NBA's collective bargaining agreement, players can hold up to 1% stakes in sports betting companies, and Antetokounmpo's investment complies with this rule while he will also engage in Kalshi's marketing and live events.
- Market Impact: His investment has sparked discussions on social media, particularly on platforms like Reddit, indicating that athletes' influence and participation in financial markets are on the rise, potentially attracting more athletes to the fintech sector.
- Collaboration Outlook: Kalshi's partnership with Antetokounmpo will focus on marketing and event promotion, and although he is restricted from trading in NBA-related markets, this collaboration is expected to enhance Kalshi's brand visibility and expand its user base.
See More
U.S. Stocks Surge as Tech Earnings Boost Market Sentiment
- Tech Stock Rebound: The S&P 500 rose by 1.20% and the Dow Jones Industrial Average surged by 1.48%, reaching an all-time high, driven by better-than-expected tech earnings that boosted investor confidence in the sector's recovery.
- Bitcoin Recovery: Bitcoin rebounded over 7% from a 1.25-year low, lifting cryptocurrency-exposed stocks and alleviating concerns about liquidity in the crypto market, indicating renewed investor interest in digital assets.
- Amazon Investment Concerns: Amazon's announcement of a $200 billion investment in data centers, chips, and other equipment led to a more than 9% drop in its stock, raising doubts about the long-term returns of its AI investments and potentially impacting future investor confidence.
- Earnings Season Insights: With 79% of S&P 500 companies exceeding expectations and Q4 earnings projected to grow by 8.4%, this indicates strong corporate profitability, which may provide ongoing support for the market despite economic uncertainties.
See More
Reddit Reports Strong Earnings, Stock Volatility Observed
- Strong Earnings Report: Reddit reported fourth-quarter revenue of $726 million, exceeding the market consensus of $665 million, indicating robust performance in its advertising business, which is expected to further drive stock recovery.
- Earnings Beat: The company achieved earnings per share of $1.24, significantly surpassing the analyst estimate of $0.94, demonstrating a notable improvement in profitability that may attract more investor interest.
- Stock Buyback Program: Reddit announced a $1 billion stock repurchase program with no set expiration date, aimed at enhancing shareholder value and boosting market confidence in the company's future prospects.
- Market Volatility Reaction: Despite an initial 9% surge in stock price on Friday morning, shares reversed course to decline nearly 5%, reflecting market caution towards high-volatility stocks, which could influence short-term investor decisions.
See More
