The latest trading session saw Reddit Inc. (RDDT) ending at $109.50, denoting a -0.5% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.67%. Meanwhile, the Dow gained 0.56%, and the Nasdaq, a tech-heavy index, added 0.87%.
Coming into today, shares of the company had lost 30.86% in the past month. In that same time, the Computer and Technology sector lost 7.99%, while the S&P 500 lost 5.28%.
Investors will be eagerly watching for the performance of Reddit Inc. in its upcoming earnings disclosure. On that day, Reddit Inc. is projected to report earnings of $0.02 per share, which would represent a year-over-year decline of 93.1%. Simultaneously, our latest consensus estimate expects the revenue to be $374.53 million, showing a 54.15% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.16 per share and revenue of $1.83 billion, which would represent changes of +134.83% and +40.43%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Reddit Inc. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Reddit Inc. boasts a Zacks Rank of #1 (Strong Buy).
With respect to valuation, Reddit Inc. is currently being traded at a Forward P/E ratio of 94.5. This represents a premium compared to its industry's average Forward P/E of 26.68.
Meanwhile, RDDT's PEG ratio is currently 2.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 2.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 75, positioning it in the top 31% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Reddit Inc. (RDDT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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