Reddit Inc. (RDDT) Outperforms Broader Market: What You Need to Know

Reddit Inc. (RDDT) ended the recent trading session at $141.14, demonstrating a +2.02% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.08%. Meanwhile, the Dow experienced a drop of 0.18%, and the technology-dominated Nasdaq saw an increase of 0.1%.

Heading into today, shares of the company had lost 0.37% over the past month, outpacing the Computer and Technology sector's loss of 2.82% and the S&P 500's loss of 1.74%.

Analysts and investors alike will be keeping a close eye on the performance of Reddit Inc. in its upcoming earnings disclosure. In that report, analysts expect Reddit Inc. to post earnings of $0.62 per share. This would mark year-over-year growth of 376.92%. Our most recent consensus estimate is calling for quarterly revenue of $614.09 million, up 56.51% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.02 per share and a revenue of $3.16 billion, signifying shifts of +53.44% and +43.44%, respectively, from the last year.

Any recent changes to analyst estimates for Reddit Inc. should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Reddit Inc. boasts a Zacks Rank of #3 (Hold).

Looking at its valuation, Reddit Inc. is holding a Forward P/E ratio of 34.4. This indicates a premium in contrast to its industry's Forward P/E of 19.31.

We can also see that RDDT currently has a PEG ratio of 1.01. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.07.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 146, finds itself in the bottom 41% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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