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Why Reddit Inc. (RDDT) Dipped More Than Broader Market Today

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In the latest trading session, Reddit Inc. (RDDT - Free Report) closed at $232.75, marking a -1.25% move from the previous day. This move lagged the S&P 500's daily loss of 0.5%. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.5%.

The stock of company has risen by 11.65% in the past month, leading the Computer and Technology sector's gain of 8.21% and the S&P 500's gain of 2.74%.

The investment community will be closely monitoring the performance of Reddit Inc. in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.5, marking a 212.5% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $549.69 million, up 57.8% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $1.82 per share and a revenue of $2.05 billion, demonstrating changes of +154.65% and +57.36%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Reddit Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.78% higher. Reddit Inc. currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note Reddit Inc.'s current valuation metrics, including its Forward P/E ratio of 129.56. This expresses a premium compared to the average Forward P/E of 31.31 of its industry.

We can also see that RDDT currently has a PEG ratio of 3.71. 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. Internet - Software stocks are, on average, holding a PEG ratio of 2.28 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 73, placing it within the top 30% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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