Reddit Inc. Investment: Brokerages Suggest Strong Buy Amidst Market Trends

Reddit Inc. (RDDT) has an average brokerage recommendation (ABR) of 1.88, indicating a Strong Buy rating. Of the 26 recommendations, 15 are Strong Buy and one is Buy. However, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation, as analysts tend to rate stocks with a strong positive bias due to vested interests. Validating the Zacks Rank with ABR could help make a profitable investment decision.

Reddit Inc. (RDDT), the social news aggregation and discussion website, has received a significant boost as it was recently upgraded to the Zacks Rank #1 list on August 7, 2025. This upgrade is a result of analysts revising their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing to $1.81 per share. The company has shown an impressive average earnings surprise of 261.9% and is expected to post earnings growth of 154.4% and revenue growth of 57.3% for the current fiscal year. Over the past four weeks, RDDT has gained 45.2%, outperforming the S&P 500's 2.7% gain [1].

The Zacks Rank #1 rating indicates a strong buy signal, suggesting that the stock is expected to outperform the broader market in the near term. This rating is based on a proprietary stock rating tool that effectively harnesses the power of earnings estimate revisions [1].

The company's earnings estimate revisions have been substantial. Over the last 30 days, the Zacks Consensus Estimate for the current fiscal year has changed by +49.6%, reflecting a robust increase in expected earnings. Similarly, the estimate for the next fiscal year has changed by +39.8%, further indicating analyst confidence in the company's future performance [1].

Reddit Inc. has also shown strong revenue growth. The consensus sales estimate for the current quarter points to a year-over-year change of +57.8%, while estimates for the current and next fiscal years indicate changes of +57.2% and +33.1%, respectively. This revenue growth is crucial as it underpins the company's earnings growth [1].

Institutional investors have also shown interest in Reddit Inc. RWA Wealth Partners LLC recently acquired a new stake in the company, purchasing 3,890 shares valued at approximately $408,000 during the first quarter. This acquisition is part of a broader trend of increased institutional investment in the company [2].

Moreover, insiders have been active in their stock transactions. CTO Christopher Brian Slowe sold 16,000 shares of the company's stock in a transaction on July 22nd, while COO Jennifer L. Wong sold 32,379 shares on August 18th. These transactions, totaling 363,364 shares worth $53,557,742, represent a significant portion of the company's stock, with insiders owning 34.25% of the company's stock [2].

Analysts have also set new price targets for Reddit Inc. Needham & Company LLC lifted their target price on shares of Reddit from $165.00 to $215.00 and gave the stock a "buy" rating, reflecting their optimism about the company's future prospects [2].

In conclusion, Reddit Inc. has received a strong bullish signal from analysts, with its Zacks Rank #1 upgrade indicating a potential for significant outperformance. The company's robust earnings and revenue growth estimates, along with increased institutional investment and insider activity, provide a compelling case for investors to consider adding Reddit Inc. to their portfolios.

References
[1] https://www.ainvest.com/news/reddit-upgraded-zacks-rank-1-strong-buy-portfolio-2508/
[2] https://www.marketbeat.com/instant-alerts/filing-rwa-wealth-partners-llc-takes-408000-position-in-reddit-inc-rddt-2025-08-21/