Reddit Stock Is Ripping Higher Wednesday: What's Happening?

Reddit Inc. RDDT shares are on the rise Wednesday after the company reported strong third-quarter results and provided upbeat revenue guidance. Multiple analysts also lifted price targets following the print. Here’s what you need to know.

What To Know: After the market closed on Tuesday, Reddit reported earnings of 16 cents per share for the third quarter, exceeding analyst expectations for a loss of 8 cents per share. The company said revenue reached $348.4 million in the quarter, surpassing the estimate of $311.42 million.

Gross margin improved to 90.1%, up 280 basis points from the prior year. Reddit generated $71.6 million in operating cash flow and $70.3 million in free cash flow during the third quarter. Daily active uniques increased 47% year-over-year to 97.2 million.

“It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability,” said Steve Huffman, co-Founder and CEO of Reddit. “Reddit continues to be one of the most visited and trusted sites in the world with opportunities available to us that aren’t available to most companies.”

See Also: Reddit ‘Remains A Favorite’ For Wall Street After ‘Emphatic Beat And Raise’ In Q3

What’s Next: For the fourth quarter, Reddit expects revenue between $385 million and $400 million, versus estimates of $356.716 million. Adjusted EBITDA is expected to be between $110 million and $125 million.

Following Reddit’s quarterly report, several analysts raised price targets. Needham increased its target from $85 to $120, BofA Securities raised its target from $84 to $99, Piper Sandler went from $70 to $115, B. Riley Securities raised its target from $87 to $112 and Roth MKM raised from $89 to $116.

RDDT Price Action: Reddit shares were up 42.1% at 116.14 at the time of publication, according to Benzinga Pro.

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