In the latest close session, Reddit Inc. (RDDT) was up +1.6% at $143.95. The stock's performance was ahead of the S&P 500's daily gain of 0.8%. On the other hand, the Dow registered a gain of 0.94%, and the technology-centric Nasdaq increased by 0.97%.
The company's stock has climbed by 34.38% in the past month, exceeding the Computer and Technology sector's gain of 8.5% and the S&P 500's gain of 5.12%.
The investment community will be paying close attention to the earnings performance of Reddit Inc. in its upcoming release. The company's upcoming EPS is projected at $0.19, signifying a 416.67% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $426.3 million, reflecting a 51.61% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.21 per share and revenue of $1.85 billion. These totals would mark changes of +136.34% and +42.01%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Reddit Inc. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.28% lower within the past month. Reddit Inc. currently has a Zacks Rank of #3 (Hold).
With respect to valuation, Reddit Inc. is currently being traded at a Forward P/E ratio of 117.44. This expresses a premium compared to the average Forward P/E of 28 of its industry.
Also, we should mention that RDDT has a PEG ratio of 3.64. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 2.22.
The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 48, placing it within the top 20% of over 250 industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Reddit Inc. (RDDT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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