Reddit's Q4 Earnings Test: Soaring Stock Meets Elon Musk-Fueled Chaos

Reddit Inc RDDT is set to report its fourth-quarter earnings on Wednesday. Wall Street expects 25 cents in EPS and $405.26 million in revenues as the company reports after market hours.

The stock is up 331.23% over the past year, 31.1% year-to-date.

Reddit’s Rally Faces A Musk-Sized Distraction Ahead Of Q4 Earnings

As Reddit gears up for its fourth-quarter earnings, tensions with billionaire Elon Musk are escalating. Musk accuses Reddit of enabling threats against his employees (Musk owns, or co-owns, Tesla, SpaceX, X, The Boring Company, Neuralink and xAI).

The feud has already led to subreddit bans and a wave of protests, but investors seem unfazed—Reddit shares have skyrocketed 330% over the past year. With Ark Invest trimming its stake and Musk stirring controversy, all eyes are now on whether earnings will keep the stock's momentum intact or if this drama sparks volatility.

Let’s look at what the charts indicate for Reddit stock and how the stock currently maps against Wall Street estimates.

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

Reddit Stock Moderately Bullish Ahead Of Q4 Earnings

Reddit stock, at $213, is experiencing a moderately bullish trend, with its share price above key long-term moving averages. However, the stock is encountering selling pressure, which raises the risk of future bearish movement.

Chart created using Benzinga Pro

Reddit stock is slightly below its eight-day simple moving average (SMA) of $216.53, generating a bearish signal in the short term.

Despite this short-term weakness, Reddit stock remains above its 20-day SMA of $198.28. It’s also above its 50-day SMA of $178.49, both of which signal a bullish outlook. The stock is also well above its 200-day SMA of $98.39, further reinforcing its positive technical stance.

The Moving Average Convergence Divergence (MACD) indicator, at 13.23, suggests that Reddit stock is still in a bullish phase. However, with a Relative Strength Index (RSI) of 63.24, the stock is approaching overbought levels, which could indicate that investors should watch for potential pullbacks or increased volatility.

Reddit Analysts See 4% Downside

Ratings & Consensus Estimates: The consensus analyst rating on Reddit stock stands at a Buy currently with a price target of $159.91. Raymond James and JMP Securities’ latest ratings suggest a 3.43% downside for Reddit, with a $210 average target.

RDDT Stock Price Action: Reddit stock was trading at $225.47 at the time of publication.

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