In the latest close session, Reddit Inc. (RDDT) was down 1.42% at $139.15. The stock's change was less than the S&P 500's daily loss of 0.22%. Meanwhile, the Dow experienced a rise of 0.08%, and the technology-dominated Nasdaq saw a decrease of 0.51%.
Heading into today, shares of the company had gained 43.57% over the past month, outpacing the Computer and Technology sector's gain of 2.98% and the S&P 500's gain of 0.45%.
The investment community will be closely monitoring the performance of Reddit Inc. in its forthcoming earnings report. The company is expected to report EPS of $0.19, up 416.67% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $426.3 million, indicating a 51.61% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.21 per share and a revenue of $1.85 billion, representing changes of +136.34% and +42.01%, respectively, from the prior year.
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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
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 past month, there's been a 0.28% fall in the Zacks Consensus EPS estimate. Reddit Inc. is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Reddit Inc. is currently trading at a Forward P/E ratio of 117.01. This denotes a premium relative to the industry average Forward P/E of 27.94.
Also, we should mention that RDDT has a PEG ratio of 3.62. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Internet - Software industry stood at 2.11 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 52, this industry ranks in the top 22% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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