TLDR
- Bank of America reduced Reddit’s price target from $205 down to $175 while maintaining a “neutral” stance
- Shares have plummeted 41% year-to-date, hovering near $136, even after impressive Q4 results
- Fourth quarter revenue reached $725.6M, reflecting 70% year-over-year growth and surpassing forecasts by 9%
- Steve Huffman, Reddit’s CEO, offloaded approximately $2.39M worth of shares on March 31 through a pre-planned trading arrangement
- UK regulators imposed a £14.47M penalty on Reddit for inadequate protection of children’s personal information
Reddit delivered impressive financial performance in its fourth quarter. The company generated $725.6 million in revenue, marking a 70% increase compared to the prior year period and exceeding analyst projections by 9%. Adjusted EBITDA surged 112% year-over-year, reaching $327 million. Earnings per share came in at $1.24, significantly outperforming the $0.96 consensus estimate.
Yet the market response has been dramatically negative.
RDDT shares have tumbled 41% since the beginning of the year, currently changing hands around $136. This represents a substantial decline from the 12-month peak of $282.95. On Thursday, Bank of America reduced its price objective from $205 to $175, maintaining a neutral perspective — although this updated target still suggests potential upside of approximately 28% from present levels.
Bank of America isn’t the only institution expressing reservation. Goldman Sachs lowered its target from $236 to $206 with a neutral rating in February. Both Roth MKM and Robert W. Baird have adopted neutral-to-hold stances on the stock.
However, optimism persists among some analysts. Evercore kept its outperform rating intact with a $290 price objective. Truist Securities increased its target to $275 following the Q4 report, describing it as a “Classic Beat & Raise” performance. Citizens maintained its market outperform designation and $300 target, highlighting 75% year-over-year growth in advertising revenue during Q4.
The analyst community’s consensus currently stands at “Moderate Buy” with an average price target of $240.85 — nearly twice the stock’s current trading level.
CEO Sells, Director Buys
Insider transactions have painted a mixed picture. CEO Steve Huffman offloaded 14,697 shares on March 31, generating approximately $2.39 million through transactions executed between $126.40 and $134.84. This sale occurred under a pre-established Rule 10b5-1 trading plan created in May 2025. Huffman maintains ownership of more than 490,000 shares held across multiple trusts.
Earlier in the year, Huffman also divested 18,000 shares in January at $232.78, collecting roughly $4.19 million.
Conversely, Director Sarah Farrell demonstrated confidence by purchasing 43,800 shares in February at $149.52 — representing a $6.5 million investment in the company’s potential turnaround.
Throughout the most recent quarter, company insiders sold $61.25 million in stock while purchasing $8.87 million. Insiders control 34.25% of the overall company.
UK Regulator Hits Reddit With £14.47M Fine
Reddit is also grappling with regulatory challenges in the United Kingdom. The Information Commissioner’s Office levied a £14.47 million fine against the platform for insufficient safeguards protecting children’s personal data. Authorities determined that Reddit’s age verification systems fell short of required standards.
The company announced a $1 billion share repurchase program concurrent with its Q4 earnings — a strategic decision that demonstrates management’s conviction despite the stock’s recent downturn.
Citizens identified a potential red flag deserving attention: platform engagement in the U.S. declined 10.5% year-over-year in January, even as advertising revenue maintained upward momentum.
Reddit’s 50-day moving average currently stands at $150.24, while the 200-day average is positioned at $195.96. The stock exhibits a beta of 2.39, indicating it experiences amplified volatility compared to the broader market — swinging dramatically in both upward and downward directions.
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