Reddit Shares Are Trading Higher Friday: What's Going On?

Reddit, Inc. (NYSE:RDDT) shares are trading higher Friday after the company reported better-than-expected third quarter financial results and issued fourth quarter sales guidance above estimates. Also, the company reported a year-over-year increase in Q3 Daily Active Uniques.

What To Know: Reddit reported earnings per share of 80 cents, beating the consensus estimate of 52 cents. In addition, the company reported sales of $585.00 million, beating the consensus estimate of $545.71 million.

Daily Active Uniques rose 19% year-over-year to 116 million, while revenue increased 68% from the prior year. Ad revenue grew 74% year-over-year to $549 million and other revenue increased 7% to $36 million.

CEO Steve Huffman said Reddit "provides something rare on the Internet," noting that 444 million people visit the platform weekly for authentic conversations and brand engagement. The company also reported improvements across all major profitability metrics, with operating cash flow up to $185 million and free cash flow rising to $183 million.

Outlook: The company sees fourth quarter sales from $655.00 million to $665.00 million, versus the consensus estimate of $637.88 million.

Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.

• B of A Securities analyst Justin Post maintained a Neutral rating on Reddit and raised the price target from $180 to $210.
• Needham analyst Laura Martin reiterated a Buy rating on Reddit and maintained a $300 price target.

See Also: Palantir Co-Founder Says AI Giants Face Endless Capital Hunt But ‘Afraid To Scare Their Investor’

RDDT Price Action: At the time of publication, Reddit shares are trading 13.84% higher at $221.33, according to data from Benzinga Pro.

Image via Shutterstock