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Reddit and Dave & Buster have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 7, 2025 – Zacks Equity Research shares Reddit (RDDT - Free Report) as the Bull of the Day and Dave & Buster (PLAY - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Delta Air Lines, Inc. (DAL - Free Report) , Union Pacific (UNP - Free Report) and Landstar Systems (LSTR - Free Report) .
Investors, especially traders, are familiar with Reddit and have helped increase the social media company's popularity by engaging in its infamous community-led platforms, such as WallStreetBets, which has been instrumental in creating the meme stock phenomenon.
We can all recount some of the most famous meme stocks that often surge due to heightened popularity on Reddit, with GameStop and AMC Entertainment coming to mind.
Over the years, this attention has made Reddit one of the fastest-growing media outlets, given its niche as a destination for meaningful social news aggregation.
Known as the "front page of the internet", it's no surprise that Reddit stock has been one of the hottest IPO's since going public in March of last year, with RDDT now up an exhilarating +300%.
Better still, the call for more upside is starting to be justified as Reddit's strong user engagement and explosive advertising growth are starting to magnify its future earnings potential.
Advertising Revenue Boom
Like most social media companies, including giants like Meta Platforms, Reddit derives the majority of its revenue from advertising, and most recently reported an 84% increase in ad revenue of $465 million during Q2. This was attributed to a 50% increase in active advertisers, with Reddit also posting a 47% spike in average revenue per user (ARPU) at $4.53.
Lifting advertiser interest and its internal operations has been Reddit Pixel, CAPI, and Smarty.io (AI-Powered Automation), which are ad tools that are boosting and integrating user conversion and tracking data. Overall, Reddit's Q2 sales soared over 77% to $499.63 million.
Notably, Reddit is scheduled to release Q3 results on Tuesday, November 4th, with Zacks projections calling for its top line to expand nearly 58% to $549.69 million compared to $348.35 million in the prior year quarter (Current Qtr below).
More intriguing, Reddit's annual sales are now expected to climb over 57% in fiscal 2025 and are projected to soar another 34% in FY26 to $2.74 billion.
Strong User Engagement Metrics
Most compelling about Reddit's strong user engagement metrics is an expanding global base, as international daily active users (DAU) increased 32% during Q2 to 60.1 million. It's noteworthy that this drove a more than 70% surge in global revenue, with total DAUs increasing 21% to 110.4 million.
It's also important to point out that Reddit's log-out users were at 61.1 million, and are growing faster than its log-in users, suggesting its reach is expanding beyond its core community.
Reddit Surges Past The Profitability Line
Getting to Reddit's earnings potential, Q2 2025 marked the company's first profitable quarter despite previously reporting positive earnings per share (EPS) in other quarters. However, in terms of a dollar amount, Reddit's adjusted net income swung into the black for the first time at $89 million from a loss of $10 million in Q2 2024.
Gross margins also hit a new peak of 90.8%, with Reddit launching a high-margin data licensing business to complement its ad revenue model in which it sells access to vast troves of user-generated content for AI training and analytics.
Furthermore, many analysts predict Reddit will turn an annual net profit of over $150 million this year, compared to a net loss of $484 million in 2024.
Reddit is projected to post high-double-digit EPS growth for the foreseeable future, with Q2 earnings of $0.45 a share crushing expectations of $0.20 and skyrocketing from an adjusted loss of -$0.06 per share a year ago. Even better is that FY25 and FY26 EPS revisions have trended noticeably higher over the last 90 days.
RDDT Price Target & Analyst Upgrades
Based on short-term price targets offered by 25 analysts, the current Average Zacks Price Target of $223.72 a share suggests 8% upside for Reddit stock.
That said, RDDT is starting to receive more bullish forecasts based on Reddit's growth trajectory, with JMP Securities and Piper Sandler recently lifting their price targets to street-highs of $300 and $290, respectively.
Bottom Line
Having an expansive user base, Reddit's platform is capable of generating lucrative advertising revenue, which is being glorified by better monetization per user. Keeping this in mind, RDDT could have more room to run as Reddit looks poised to grow into its valuation.
Despite rumors, Dave & Buster's is not closing down and is actually expanding with new locations under construction and strategic growth plans in place.
However, this transition has taken a toll on investor sentiment as Dave & Buster's has had a slow recovery from pandemic-related struggles and a more infation conscious consumer. Trying to navigate a challenging operating environment, Dave & Buster's stock has drifted toward new multi-year lows at under $20 a share.
That said, PLAY shares could have more downside risk ahead, with it noteworthy that Dave & Buster's Zacks Retail-Restaurants Industry is currently in the bottom 21% of over 240 Zacks industries.
Profitability Collapse & Cautious Outlook
Coming off a disappointing Q2 report, the decline in Dave & Buster's profitability is more concerning due to a cautious outlook from its new CEO, Tarun Lal, who took over in May of 2024. Acknowledging strategic missteps and operational inefficiencies, Lal's remarks have suggested a long road to recovery, which has further weighed on investor confidence.
This comes as Dave & Buster's reported Q2 EPS of $0.40 last month, which plummeted from $1.12 per share in the comparative quarter and missed expectations of $0.88 by a grizzly 54%. Furthermore, Dave & Buster's has missed EPS expectations in three of its last four quarterly reports with an average earnings surprise of -18.68%.
Highlighting Dave & Buster's profitability collapse, Q2 net income was down 67% to $11.4 million versus $40.3 million a year ago. Dave & Buster's EBITDA margins dropped to 23.3% from 27.2% in Q2 2024, attributed to rising operating costs and stagnant revenue.
Declining EPS Revisions
Correlating with a Zacks Rank #5 (Strong Sell) and landing Dave & Buster's stock the Bear of the Day, fiscal 2025 and FY26 EPS estimates have dropped mightily in the last 60 days.
Plummeting over 70% in the last two months, FY25 EPS estimates have gone to $0.44 from $1.56. While Dave & Buster's bottom line is projected to stabilize and rebound in FY26, EPS revisions have fallen 65% from $2.03 eight weeks ago to $0.71.
Dave & Buster's Deteriorating Valuation
Of course, such a steep decline in earnings estimate revisions is starting to deteriorate Dave & Buster's valuation, which is illustrated in the fast spike to a 3-year high forward P/E multiple of 42.8X, with the industry average at 26X and closer to the benchmark S&P 500.
Summary
PLAY has had the remnants of a value trap for quite some time, but the cat is out of the bag now, considering Dave & Buster's diminishing EPS outlook. Following a disappointing Q2 report that continued to show a decline in profitability and was met with cautious guidance from its new CEO, it may still be best to avoid Dave & Buster's stock for now.
Additional content:
Is a Q3 Beat in the Cards for Delta Air Lines?
Delta Air Lines, Inc. is scheduled to report third-quarter 2025 results on Oct. 9, before the market opens.
The Zacks Consensus Estimate for earnings is pegged at $1.60 per share, indicating a 6.7% year-over-year increase. The Zacks Consensus Estimate for revenues is pegged at $15.9 billion, indicating a 1.6% increase from the third-quarter 2024 actuals.
DAL has an impressive earnings surprise history, surpassing the Zacks Consensus Estimate in three of the trailing four quarters and missing once. The average beat is 4.8%.
Factors Likely to Have Influenced DAL's Q3 Performance
We expect DAL's performance in the to-be-reported quarter to be boosted by an uptick in total revenues, driven by high passenger revenues as domestic air-travel demand stabilizes. Our estimate for passenger revenues in the to-be-reported quarter indicates a 3.4% increase from third-quarter 2024 actuals. Meanwhile, our model estimates for other revenues are pegged at $2.38 million,indicating 0.2% growth from the prior-year figures.
Moreover, the company expects a strong cost performance in the September-end quarter of 2025, projecting its best non-fuel unit cost results of the year, with expenses anticipated to remain flat or decline compared to 2024.
On the contrary, we expect geopolitical uncertainty, tariff-related pressures and persistent inflation to weigh on DAL's operations and weaken travel demand, especially in the international and business segments. These headwinds may have resulted in volatility in passenger traffic and, in turn, limited the airline's ability to maintain strong yields and consistent revenue growth.
What Our Model Says About DAL
Our proven model predicts an earnings beat for Delta Air Lines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Delta Air Lines has an Earnings ESP of +1.42% and a Zacks Rank #2.
Highlights of DAL's Q2 Earnings
Delta Air Lines reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.
Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.
Other Stocks to Consider
Here are a few more stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle. See the Zacks Earnings Calendar to stay ahead of market-moving news.
The Zacks Consensus Estimate for third-quarter 2025 earnings has been revised 0.34% upward over the past 60 days. UNP's earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed in the remaining two, the average beat being 2.02%.
Landstar Systems has an Earnings ESP of +0.49% and a Zacks Rank #3 at present. LSTR is scheduled to report third-quarter 2025 earnings on Oct. 28.
The company's bottom line in the to-be-reported quarter is expected to benefit from robust cross-border transportation demand, as more companies shift production to Mexico to reduce costs and enhance supply-chain security. Additionally, the continued development of the company's heavy haul services is likely to further support profitability and margin expansion.
Free: Instant Access to Zacks' Market-Crushing Strategies
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 tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.
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Reddit and Dave & Buster have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 7, 2025 – Zacks Equity Research shares Reddit (RDDT - Free Report) as the Bull of the Day and Dave & Buster (PLAY - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Delta Air Lines, Inc. (DAL - Free Report) , Union Pacific (UNP - Free Report) and Landstar Systems (LSTR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Investors, especially traders, are familiar with Reddit and have helped increase the social media company's popularity by engaging in its infamous community-led platforms, such as WallStreetBets, which has been instrumental in creating the meme stock phenomenon.
We can all recount some of the most famous meme stocks that often surge due to heightened popularity on Reddit, with GameStop and AMC Entertainment coming to mind.
Over the years, this attention has made Reddit one of the fastest-growing media outlets, given its niche as a destination for meaningful social news aggregation.
Known as the "front page of the internet", it's no surprise that Reddit stock has been one of the hottest IPO's since going public in March of last year, with RDDT now up an exhilarating +300%.
Better still, the call for more upside is starting to be justified as Reddit's strong user engagement and explosive advertising growth are starting to magnify its future earnings potential.
Advertising Revenue Boom
Like most social media companies, including giants like Meta Platforms, Reddit derives the majority of its revenue from advertising, and most recently reported an 84% increase in ad revenue of $465 million during Q2. This was attributed to a 50% increase in active advertisers, with Reddit also posting a 47% spike in average revenue per user (ARPU) at $4.53.
Lifting advertiser interest and its internal operations has been Reddit Pixel, CAPI, and Smarty.io (AI-Powered Automation), which are ad tools that are boosting and integrating user conversion and tracking data. Overall, Reddit's Q2 sales soared over 77% to $499.63 million.
Notably, Reddit is scheduled to release Q3 results on Tuesday, November 4th, with Zacks projections calling for its top line to expand nearly 58% to $549.69 million compared to $348.35 million in the prior year quarter (Current Qtr below).
More intriguing, Reddit's annual sales are now expected to climb over 57% in fiscal 2025 and are projected to soar another 34% in FY26 to $2.74 billion.
Strong User Engagement Metrics
Most compelling about Reddit's strong user engagement metrics is an expanding global base, as international daily active users (DAU) increased 32% during Q2 to 60.1 million. It's noteworthy that this drove a more than 70% surge in global revenue, with total DAUs increasing 21% to 110.4 million.
It's also important to point out that Reddit's log-out users were at 61.1 million, and are growing faster than its log-in users, suggesting its reach is expanding beyond its core community.
Reddit Surges Past The Profitability Line
Getting to Reddit's earnings potential, Q2 2025 marked the company's first profitable quarter despite previously reporting positive earnings per share (EPS) in other quarters. However, in terms of a dollar amount, Reddit's adjusted net income swung into the black for the first time at $89 million from a loss of $10 million in Q2 2024.
Gross margins also hit a new peak of 90.8%, with Reddit launching a high-margin data licensing business to complement its ad revenue model in which it sells access to vast troves of user-generated content for AI training and analytics.
Furthermore, many analysts predict Reddit will turn an annual net profit of over $150 million this year, compared to a net loss of $484 million in 2024.
Reddit is projected to post high-double-digit EPS growth for the foreseeable future, with Q2 earnings of $0.45 a share crushing expectations of $0.20 and skyrocketing from an adjusted loss of -$0.06 per share a year ago. Even better is that FY25 and FY26 EPS revisions have trended noticeably higher over the last 90 days.
RDDT Price Target & Analyst Upgrades
Based on short-term price targets offered by 25 analysts, the current Average Zacks Price Target of $223.72 a share suggests 8% upside for Reddit stock.
That said, RDDT is starting to receive more bullish forecasts based on Reddit's growth trajectory, with JMP Securities and Piper Sandler recently lifting their price targets to street-highs of $300 and $290, respectively.
Bottom Line
Having an expansive user base, Reddit's platform is capable of generating lucrative advertising revenue, which is being glorified by better monetization per user. Keeping this in mind, RDDT could have more room to run as Reddit looks poised to grow into its valuation.
Bear of the Day:
Despite rumors, Dave & Buster's is not closing down and is actually expanding with new locations under construction and strategic growth plans in place.
However, this transition has taken a toll on investor sentiment as Dave & Buster's has had a slow recovery from pandemic-related struggles and a more infation conscious consumer. Trying to navigate a challenging operating environment, Dave & Buster's stock has drifted toward new multi-year lows at under $20 a share.
That said, PLAY shares could have more downside risk ahead, with it noteworthy that Dave & Buster's Zacks Retail-Restaurants Industry is currently in the bottom 21% of over 240 Zacks industries.
Profitability Collapse & Cautious Outlook
Coming off a disappointing Q2 report, the decline in Dave & Buster's profitability is more concerning due to a cautious outlook from its new CEO, Tarun Lal, who took over in May of 2024. Acknowledging strategic missteps and operational inefficiencies, Lal's remarks have suggested a long road to recovery, which has further weighed on investor confidence.
This comes as Dave & Buster's reported Q2 EPS of $0.40 last month, which plummeted from $1.12 per share in the comparative quarter and missed expectations of $0.88 by a grizzly 54%. Furthermore, Dave & Buster's has missed EPS expectations in three of its last four quarterly reports with an average earnings surprise of -18.68%.
Highlighting Dave & Buster's profitability collapse, Q2 net income was down 67% to $11.4 million versus $40.3 million a year ago. Dave & Buster's EBITDA margins dropped to 23.3% from 27.2% in Q2 2024, attributed to rising operating costs and stagnant revenue.
Declining EPS Revisions
Correlating with a Zacks Rank #5 (Strong Sell) and landing Dave & Buster's stock the Bear of the Day, fiscal 2025 and FY26 EPS estimates have dropped mightily in the last 60 days.
Plummeting over 70% in the last two months, FY25 EPS estimates have gone to $0.44 from $1.56. While Dave & Buster's bottom line is projected to stabilize and rebound in FY26, EPS revisions have fallen 65% from $2.03 eight weeks ago to $0.71.
Dave & Buster's Deteriorating Valuation
Of course, such a steep decline in earnings estimate revisions is starting to deteriorate Dave & Buster's valuation, which is illustrated in the fast spike to a 3-year high forward P/E multiple of 42.8X, with the industry average at 26X and closer to the benchmark S&P 500.
Summary
PLAY has had the remnants of a value trap for quite some time, but the cat is out of the bag now, considering Dave & Buster's diminishing EPS outlook. Following a disappointing Q2 report that continued to show a decline in profitability and was met with cautious guidance from its new CEO, it may still be best to avoid Dave & Buster's stock for now.
Additional content:
Is a Q3 Beat in the Cards for Delta Air Lines?
Delta Air Lines, Inc. is scheduled to report third-quarter 2025 results on Oct. 9, before the market opens.
The Zacks Consensus Estimate for earnings is pegged at $1.60 per share, indicating a 6.7% year-over-year increase. The Zacks Consensus Estimate for revenues is pegged at $15.9 billion, indicating a 1.6% increase from the third-quarter 2024 actuals.
DAL has an impressive earnings surprise history, surpassing the Zacks Consensus Estimate in three of the trailing four quarters and missing once. The average beat is 4.8%.
Factors Likely to Have Influenced DAL's Q3 Performance
We expect DAL's performance in the to-be-reported quarter to be boosted by an uptick in total revenues, driven by high passenger revenues as domestic air-travel demand stabilizes. Our estimate for passenger revenues in the to-be-reported quarter indicates a 3.4% increase from third-quarter 2024 actuals. Meanwhile, our model estimates for other revenues are pegged at $2.38 million,indicating 0.2% growth from the prior-year figures.
Moreover, the company expects a strong cost performance in the September-end quarter of 2025, projecting its best non-fuel unit cost results of the year, with expenses anticipated to remain flat or decline compared to 2024.
On the contrary, we expect geopolitical uncertainty, tariff-related pressures and persistent inflation to weigh on DAL's operations and weaken travel demand, especially in the international and business segments. These headwinds may have resulted in volatility in passenger traffic and, in turn, limited the airline's ability to maintain strong yields and consistent revenue growth.
What Our Model Says About DAL
Our proven model predicts an earnings beat for Delta Air Lines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Delta Air Lines has an Earnings ESP of +1.42% and a Zacks Rank #2.
Highlights of DAL's Q2 Earnings
Delta Air Lines reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.
Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.
Other Stocks to Consider
Here are a few more stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle. See the Zacks Earnings Calendar to stay ahead of market-moving news.
Union Pacific has an Earnings ESP of +0.12% and a Zacks Rank #3 at present. UNP is scheduled to report third-quarter 2025 earnings on October 23. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for third-quarter 2025 earnings has been revised 0.34% upward over the past 60 days. UNP's earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed in the remaining two, the average beat being 2.02%.
Landstar Systems has an Earnings ESP of +0.49% and a Zacks Rank #3 at present. LSTR is scheduled to report third-quarter 2025 earnings on Oct. 28.
The company's bottom line in the to-be-reported quarter is expected to benefit from robust cross-border transportation demand, as more companies shift production to Mexico to reduce costs and enhance supply-chain security. Additionally, the continued development of the company's heavy haul services is likely to further support profitability and margin expansion.
Free: Instant Access to Zacks' Market-Crushing Strategies
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 tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.