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The Zacks Analyst Blog Highlights Reddit, Alphabet, Integral Ad Science and Snap
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For Immediate Release
Chicago, IL – May 27, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Reddit (RDDT - Free Report) , Alphabet (GOOGL - Free Report) , Integral Ad Science (IAS - Free Report) and Snap (SNAP - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Should You Still Hold Reddit Stock -39% YTD?
Reddit shares have plunged 38.8% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s decline of 2.6%. The ZacksInternet - Software industry increased 5.4% in the same time frame.
Shares of the company have underperformed its closest peer, Alphabet. Shares of Alphabet have lost 10.5% in the year-to-date period.
The underperformance can be attributed to the challenging macroeconomic conditions, and tariffs negatively impact spending, particularly discretionary spending, which might impact digital ad spending.
Will RDDT’s Expanding Portfolio Aid Prospects?
Reddit’s focus on diversifying its advertising solutions and enhancing ad efficiency has emerged as a critical growth driver for its business. Higher user engagement and the company’s growing artificial intelligence (AI) initiatives are noteworthy. Ad revenues increased 61% year over year to $358.6 million in the first quarter of 2025.
The company recently expanded its shopping solutions by launching Dynamic Product Ads, which are available in general. It enables advertisers to deliver personalized, contextually relevant ads that boost engagement and Return on Ad Spend.
With new features like improved machine learning targeting and larger catalog support, Reddit helps brands connect with high-intent shoppers. Additionally, Reddit integrated with Smartly, enabling advertisers to manage and optimize campaigns across channels with creative automation and unified reporting.
The company’s expanding portfolio has been a key catalyst. In May 2025, RDDT enhanced Reddit Pro with streamlined profile setup and new tools that allow businesses to showcase community conversations. These updates make it easier for brands to build trust, connect authentically, and engage with Reddit’s vast network of communities.
RDDT’s Benefits From Expanding Partnership
Reddit’s expanding partner base also strengthens its competitive prowess. RDDT expanded its collaboration with Integral Ad Science in April to offer advertisers enhanced measurement capabilities.
Integral Ad Science’s Total Media Quality for Reddit now delivers greater transparency, comprehensive reporting, and advanced AI-driven technology. With Integral Ad Science supporting global coverage across Reddit’s platforms, advertisers can confidently engage with real users and optimize campaign performance.
Reddit Earnings Estimates Show Upward Trend
For the second quarter of 2025, RDDT expects revenues between $410 million and $430 million.
For the second quarter of 2025, the Zacks Consensus Estimate for revenues is pegged at $426.12 million, indicating year-over-year growth of 51.55%.
The consensus mark for earnings is pegged at 19 cents per share, which has increased 72.7% in the past 30 days, indicating year-over-year growth of 416.67%.
Despite RDDT’s expanding advertising business and robust partnerships, the company is suffering from intense competition from Alphabet and Snap, which are expanding into advertising to compete in the rapidly growing digital ad market.
Strengthening its portfolio, in April 2025, Snap introduced Snap School sponsorships, which offer advertisers a unique opportunity to engage directly with aspiring and established Snap Stars, helping build brand visibility and foster partnerships with creators.
Snapchat’s new conversion tracking tool, Snap Pixel, is also gaining traction. The tool helps advertisers measure traffic growth on their websites. SNAP’s growing ad offerings and advanced features are attracting both advertisers and users, challenging Reddit’s market position.
Alphabet generates advertising revenues from Google Search & other, YouTube ads and Google Network, which includes revenues generated on Google Network properties participating in AdMob, AdSense and Google Ad Manager. In the first quarter of 2025, Google advertising revenues rose 8.5% year over year to $66.885 billion and accounted for 74.1% of total revenues.
RDDT Stock Overvalued
Reddit’s stock is currently trading at a premium, as suggested by the Value Score of F.
In terms of the trailing 12-month Price/Sales ratio, RDDT is trading at 8.82, higher than the broader Zacks Computer & Technology sector’s 6.10.
Conclusion: Hold RDDT Stock for Now
Reddit’s prospects benefit from an expanding advertising business, expanding clientele and improving the user experience with upgraded search and discovery features.
However, the company is suffering from intense competition from other social media platforms, which is consistently affecting user engagement and market share in advertising. Ongoing tariff uncertainties, along with stretched valuations, are a concern.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Reddit, Alphabet, Integral Ad Science and Snap
For Immediate Release
Chicago, IL – May 27, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Reddit (RDDT - Free Report) , Alphabet (GOOGL - Free Report) , Integral Ad Science (IAS - Free Report) and Snap (SNAP - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Should You Still Hold Reddit Stock -39% YTD?
Reddit shares have plunged 38.8% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s decline of 2.6%. The ZacksInternet - Software industry increased 5.4% in the same time frame.
Shares of the company have underperformed its closest peer, Alphabet. Shares of Alphabet have lost 10.5% in the year-to-date period.
The underperformance can be attributed to the challenging macroeconomic conditions, and tariffs negatively impact spending, particularly discretionary spending, which might impact digital ad spending.
Will RDDT’s Expanding Portfolio Aid Prospects?
Reddit’s focus on diversifying its advertising solutions and enhancing ad efficiency has emerged as a critical growth driver for its business. Higher user engagement and the company’s growing artificial intelligence (AI) initiatives are noteworthy. Ad revenues increased 61% year over year to $358.6 million in the first quarter of 2025.
The company recently expanded its shopping solutions by launching Dynamic Product Ads, which are available in general. It enables advertisers to deliver personalized, contextually relevant ads that boost engagement and Return on Ad Spend.
With new features like improved machine learning targeting and larger catalog support, Reddit helps brands connect with high-intent shoppers. Additionally, Reddit integrated with Smartly, enabling advertisers to manage and optimize campaigns across channels with creative automation and unified reporting.
The company’s expanding portfolio has been a key catalyst. In May 2025, RDDT enhanced Reddit Pro with streamlined profile setup and new tools that allow businesses to showcase community conversations. These updates make it easier for brands to build trust, connect authentically, and engage with Reddit’s vast network of communities.
RDDT’s Benefits From Expanding Partnership
Reddit’s expanding partner base also strengthens its competitive prowess. RDDT expanded its collaboration with Integral Ad Science in April to offer advertisers enhanced measurement capabilities.
Integral Ad Science’s Total Media Quality for Reddit now delivers greater transparency, comprehensive reporting, and advanced AI-driven technology. With Integral Ad Science supporting global coverage across Reddit’s platforms, advertisers can confidently engage with real users and optimize campaign performance.
Reddit Earnings Estimates Show Upward Trend
For the second quarter of 2025, RDDT expects revenues between $410 million and $430 million.
For the second quarter of 2025, the Zacks Consensus Estimate for revenues is pegged at $426.12 million, indicating year-over-year growth of 51.55%.
The consensus mark for earnings is pegged at 19 cents per share, which has increased 72.7% in the past 30 days, indicating year-over-year growth of 416.67%.
Reddit Inc. price-consensus-chart | Reddit Inc. Quote
RDDT Suffers from Stiff Competition
Despite RDDT’s expanding advertising business and robust partnerships, the company is suffering from intense competition from Alphabet and Snap, which are expanding into advertising to compete in the rapidly growing digital ad market.
Strengthening its portfolio, in April 2025, Snap introduced Snap School sponsorships, which offer advertisers a unique opportunity to engage directly with aspiring and established Snap Stars, helping build brand visibility and foster partnerships with creators.
Snapchat’s new conversion tracking tool, Snap Pixel, is also gaining traction. The tool helps advertisers measure traffic growth on their websites. SNAP’s growing ad offerings and advanced features are attracting both advertisers and users, challenging Reddit’s market position.
Alphabet generates advertising revenues from Google Search & other, YouTube ads and Google Network, which includes revenues generated on Google Network properties participating in AdMob, AdSense and Google Ad Manager. In the first quarter of 2025, Google advertising revenues rose 8.5% year over year to $66.885 billion and accounted for 74.1% of total revenues.
RDDT Stock Overvalued
Reddit’s stock is currently trading at a premium, as suggested by the Value Score of F.
In terms of the trailing 12-month Price/Sales ratio, RDDT is trading at 8.82, higher than the broader Zacks Computer & Technology sector’s 6.10.
Conclusion: Hold RDDT Stock for Now
Reddit’s prospects benefit from an expanding advertising business, expanding clientele and improving the user experience with upgraded search and discovery features.
However, the company is suffering from intense competition from other social media platforms, which is consistently affecting user engagement and market share in advertising. Ongoing tariff uncertainties, along with stretched valuations, are a concern.
Reddit currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.