Reddit (RDDT) Stock Hits A New 52-Week High Today: What's Driving The Action?

Shares of Reddit Inc RDDT surged to a new 52-week high Wednesday afternoon as investor optimism builds around the social media platform’s accelerating growth and monetization strategy. Here’s what investors need to know.

What To Know: The rally follows a robust second-quarter earnings report that significantly surpassed analyst expectations and prompted a series of price target upgrades from Wall Street.

The company recently announced impressive second-quarter results, posting revenue of $499.6 million, a remarkable 78% increase year-over-year that sailed past the consensus estimate of $424 million. Profitability also shined, with adjusted EBITDA reaching $167 million for a strong 33% margin.

This performance was driven by a 47% year-over-year jump in average revenue per user (ARPU) to $4.53. The powerful results were underpinned by a spike in user engagement, evidenced by a significant surge in app downloads earlier in the quarter.

Wall Street has responded with a wave of bullish sentiment. Following the earnings release, numerous analysts reaffirmed positive outlooks and raised their price targets. JP Morgan increased its target to $190, while Guggenheim and Raymond James moved theirs to $215 and $225, respectively.

Analysts highlighted the company’s successful push into monetization, with its self-serve ad platform and expanding partnerships cited as key future catalysts. While Reddit’s ARPU still trails industry giants, analysts view this gap as a substantial opportunity for continued expansion, suggesting the recent momentum has further room to run.

Benzinga Edge Rankings: According to Benzinga Edge rankings, Reddit’s stock profile is characterized by a sharp contrast between its momentum and value factors. The stock boasts an exceptional Momentum score of 97.62, indicating very strong recent price performance and positive trend strength, which aligns with its recent climb to a new high.

Conversely, RDDT scores very poorly on valuation, with a Value score of just 6.81. This suggests that, based on traditional financial metrics, the stock is considered expensive at its current price.

This combination often points to a stock that has experienced a rapid price run-up, attracting investors based on its recent performance rather than its underlying fundamental value.

Price Action: According to data from Benzinga Pro, RDDT shares are trading higher by 5.07% to $235.16 Wednesday afternoon. The stock has a 52-week high of $237.35 and a 52-week low of $52.39.

How To Buy RDDT Stock

By now you're likely curious about how to participate in the market for Reddit – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

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