Reddit Shares Dip 0.47% Amid $1.28B Volume Ranking 67th as Analysts Hike Earnings Estimates and Legal Pressures Weigh

Reddit (RDDT) shares closed 0.47% lower on August 7, with a trading volume of $1.28 billion, ranking 67th in the market. Recent developments highlight a mix of optimism and challenges for the stock.

Analysts have raised earnings estimates for Reddit, driven by a 206.3% year-over-year increase in projected Q2 earnings per share and a 154.4% rise for the full year. This has earned the company a Zacks Rank #1 (Strong Buy), reflecting strong consensus among analysts. The Zacks Consensus Estimate for the current quarter surged 53.55% over the past month, while the full-year estimate climbed 49.62%.

Positive momentum emerged from Reddit’s Q2 results, which exceeded expectations with $0.45 EPS and 78% year-over-year revenue growth. The company’s AI-driven advertising tools and expansion into search were praised by Wall Street, with multiple firms upgrading price targets. CEO Steve Huffman emphasized strategic investments in search to enhance ad monetization.

However, the stock faced downward pressure from securities lawsuits alleging fraud and broader market weakness linked to U.S. jobs data and tariffs. Investor sentiment also faced mixed options activity, with a put/call ratio of 0.61 and declining implied volatility. These factors contributed to a 1.72-point intraday drop in share price.

The strategy of purchasing the top 500 stocks by daily trading volume and holding for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This underscores the role of liquidity concentration in short-term performance, particularly in volatile markets.