In the latest trading session, Reddit Inc. (RDDT) closed at $202.60, marking a -11.91% move from the previous day. This move lagged the S&P 500's daily gain of 0.34%. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.42%.
Prior to today's trading, shares of the company had gained 4.51% lagged the Computer and Technology sector's gain of 8.07% and outpaced the S&P 500's gain of 3.54%.
Market participants will be closely following the financial results of Reddit Inc. in its upcoming release. On that day, Reddit Inc. is projected to report earnings of $0.5 per share, which would represent year-over-year growth of 212.5%. Meanwhile, the latest consensus estimate predicts the revenue to be $549.69 million, indicating a 57.8% increase compared to the same quarter of the previous year.
RDDT's full-year Zacks Consensus Estimates are calling for earnings of $1.82 per share and revenue of $2.05 billion. These results would represent year-over-year changes of +154.65% and +57.36%, respectively.
Investors should also pay attention to any latest changes in analyst estimates for Reddit Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.78% higher. Reddit Inc. currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Reddit Inc. is holding a Forward P/E ratio of 126.42. Its industry sports an average Forward P/E of 30.19, so one might conclude that Reddit Inc. is trading at a premium comparatively.
Investors should also note that RDDT has a PEG ratio of 3.62 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.3 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 59, this industry ranks in the top 24% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Reddit Inc. (RDDT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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