Reddit Stock Surges 167% Year to Date: Should You Buy the Stock?
From Nasdaq: 2024-11-11 10:58:00
- Reddit (RDDT) shares have surged 167.3% year-to-date, outperforming the Computer & Technology sector by 30% and the Internet Software industry. Snap (SNAP) shares have plummeted 29% YTD.
- Reddit’s robust stock performance is driven by a 68% revenue growth in Q3 2024, with $315.1 million from advertising revenues. Enhanced ad products and partnerships led to a 47% increase in daily active users, surpassing 100 million DAUs for the first time.
- RDDT’s expanding clientele, including partnerships with Meltwater, Google, and OpenAI, has contributed to its success. These collaborations enhance data licensing, search capabilities, and AI integration, positioning Reddit as a key player in the tech industry.
- RDDT’s stock may seem expensive based on the Value Score of F and a Price/Book ratio of 11.97X. However, the company’s earnings estimates show upward movement, with Q4 2024 revenues expected to grow by 54%-60% and the Zacks Consensus Estimate for earnings increasing by 5.33%.
- Reddit’s strong user growth, enhanced ad products, and partnerships drive continuous top-line growth. With a Zacks Rank #2 (Buy) and a Growth Score of B, RDDT offers a strong investment opportunity for investors looking to capitalize on the company’s growth prospects.
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