SAN FRANCISCO—Steve Huffman, CEO and President of Reddit, Inc. (NASDAQ:RDDT), recently sold shares of the company's Class A Common Stock, according to a filing with the Securities and Exchange Commission. The transactions, dated November 1, 2024, involved the sale of a total of 14,000 shares, generating approximately $1.58 million.
The shares were sold in multiple transactions at prices ranging from $111.41 to $115.11 per share. Following these sales, Huffman retains direct ownership of 651,775 shares in Reddit. These transactions were executed as part of a pre-established trading plan, known as a Rule 10b5-1 plan, which Huffman adopted in May 2024.
Additionally, the filing noted a conversion of 14,000 shares of Class B Common Stock into Class A Common Stock, which did not involve any monetary exchange. This conversion allows the holder to switch shares on a one-to-one basis at any time.
Investors and analysts will likely keep a close eye on these developments as they assess Reddit's market strategies and leadership decisions.
In other recent news, Reddit's third-quarter earnings report revealed a 68% increase in total revenue and a 56% rise in advertising revenue, surpassing expectations. The company's adjusted EBITDA was reported at $94 million, significantly higher than anticipated. Citi maintained a Buy rating for Reddit, attributing its positive stance to the company's daily active user growth and platform enhancements, such as machine learning advancements and improved search functionality.
Firms including B.Riley, Loop Capital, Piper Sandler, JMP Securities, and JPMorgan (NYSE:JPM) have all raised their price targets for Reddit. B.Riley specifically highlighted Reddit's robust core advertising business and significant user growth as factors contributing to the company's strong performance. Loop Capital echoed this sentiment, noting Reddit's promising potential for further monetization and user growth.
Piper Sandler raised its price target for Reddit to $115, citing the company's strong quarterly performance and future growth potential. Similarly, JMP Securities increased its price target for Reddit to $118, following the company's strong third-quarter earnings report. These recent developments underscore Reddit's robust financial performance and promising growth trajectory.
InvestingPro Insights
As Reddit's CEO Steve Huffman executes his pre-established trading plan, the company's financial metrics and market performance offer additional context for investors. According to InvestingPro data, Reddit's market capitalization stands at $19.14 billion, reflecting its significant presence in the social media landscape.
The company has shown robust growth, with revenue increasing by 48.7% over the last twelve months to $1.12 billion. This growth trajectory is further supported by an InvestingPro Tip indicating that analysts anticipate continued sales growth in the current year. Reddit's impressive gross profit margin of 89.25% underscores its efficient revenue generation, which is particularly noteworthy in the competitive tech sector.
Despite these positive indicators, it's important to note that Reddit is not yet profitable, with an operating income margin of -55.11% over the last twelve months. However, an InvestingPro Tip suggests that analysts predict the company will turn profitable this year, which could be a pivotal development for investors.
The stock's recent performance has been remarkable, with a 69.34% price return over the past month and a 125.48% return over the last three months. This strong momentum has pushed Reddit's stock price to trade near its 52-week high, with the current price at 99.17% of that peak.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips that could provide valuable insights into Reddit's financial health and market position. These tips cover various aspects such as cash holdings, earnings projections, and valuation metrics, offering a comprehensive view for potential investors.
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