Reddit Q4 Earnings Preview: Can Recently Public Company Beat Estimates Four Straight Quarters?

Reddit Inc RDDT could highlight how AI data licensing deals are helping the company's improving financials and profitability when the company reports fourth-quarter financial results after market close Wednesday.

Earnings Estimates: Analysts expect Reddit to report fourth-quarter revenue of $404.63 million according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in three straight quarters since going public. Here are the quarterly revenue totals for the fiscal year:

• First Quarter: $242.96 million
• Second Quarter: $281.18 million
• Third Quarter: $348.35 million

Analysts expect the company to report earnings per share of 25 cents for the fourth quarter. The company has beaten analyst estimates for three straight quarters, included the third quarter which had a profit of 16 cents per share.

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Key Items to Watch: Reddit's earnings report comes as AI continues to be a trending topic and monetization opportunity for many companies and sectors.

Reddit was early to the trend of media companies being paid to license out their data to the likes of Google and OpenAI for AI models. These deals have helped boost the financials for Reddit and will be among the most watched items in the quarterly results.

Analysts and investors expect to see strong revenue growth and improving profitability in the quarter.

Analysts have been bullish on Reddit in recent weeks. Here are the recent analyst ratings and price targets on Reddit:

• Raymond James: Maintained Strong Buy rating, raised price target from $200 to $250
• Seaport Global: Initiated with Neutral rating, no price target
• JMP Securities: Reiterated market Outperform, $190 price target
• Roth MKM: Downgraded from Buy to Neutral, raised price target from $116 to $195

Since going public in March 2024, Reddit has been one of the top-performing IPOs in recent history. Shares priced at $34 and the stock closed at $50.44 in its market debut. Shares are up significantly since that time.

Expectations are likely high for Reddit, which could mean a strong quarter and strong guidance is needed to send shares higher.

RDDT Price Action: Reddit stock is down 4.6% to $214.80 on Tuesday versus a 52-week trading range of $37.35 to $230.41. Reddit stock is up 29.5% year-to-date in 2024 and up over 325% in the last year.

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• 3 Reddit Executives Sold Too Early And Missed Out On $19M In Additional Gains From IPO

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