SAN FRANCISCO—Gale Mary Porter, a director at Reddit, Inc. (NASDAQ:RDDT), recently sold a significant portion of her holdings in the company. According to a recent SEC filing, Porter sold 5,000 shares of Class A common stock on November 1st at an average price of $114.40 per share, totaling approximately $572,000.
Following this transaction, Porter retains ownership of 46,459 shares in the company. Additionally, a separate transaction on November 5th involved the disposition of 150 shares, though this was recorded at a price of $0 due to a specific transaction code, which does not reflect a typical market sale. The filing notes that Porter disclaims beneficial ownership of these 150 shares.
In other recent news, Reddit has been making headlines with its impressive third-quarter earnings report, marked by a 68% rise in total revenue and a 56% increase in advertising revenue. The company's adjusted EBITDA was reported at $94 million, significantly exceeding expectations. Analyst firms including Citi, B.Riley, Loop Capital, Piper Sandler, and JMP Securities have reaffirmed their confidence in Reddit, maintaining their buy ratings and raising their price targets.
Citi's endorsement follows productive discussions with Reddit's Chief Operating Officer, Jen Wong, and the Head of Investor Relations, Jesse Rose. The firm highlighted Reddit's daily active user growth and platform enhancements, including Shreddit, machine learning advancements, and improved search functionality. Citi also noted Reddit's advertising platform expansion, which is expected to capture more advertising spend, contributing to the company's overall profitability.
B.Riley and Loop Capital raised their price targets to $112 and $120 respectively, following Reddit's strong third-quarter results. They acknowledged the company's robust core advertising business and significant user growth. Piper Sandler, JMP Securities, and JPMorgan also increased their price targets for Reddit, citing the company's strong performance and future growth potential.
Reddit's user engagement has seen a significant increase, with total conversation page views rising by 40% year-over-year. The company also reported a notable improvement in profitability, achieving positive GAAP Operating and Net Income for the first time since the fourth quarter of 2023. These recent developments underscore Reddit's strong financial performance and promising growth trajectory.
InvestingPro Insights
As Reddit's stock performance captures investor attention, InvestingPro data offers valuable context to Porter's recent share sale. The company's market capitalization stands at an impressive $21.52 billion, reflecting strong investor confidence. This aligns with Reddit's robust revenue growth, which InvestingPro data shows at 48.7% over the last twelve months as of Q3 2024, and an even more striking 67.87% growth in the most recent quarter.
InvestingPro Tips highlight Reddit's financial health, noting that the company "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations." These factors may contribute to the stock's strong performance, with a 143% price return over the past year.
Despite the positive momentum, investors should note that Reddit is "trading near 52-week high" and has a "high revenue valuation multiple," according to InvestingPro Tips. This suggests that while the company's growth story is compelling, the current valuation may be stretched.
For those seeking a deeper understanding of Reddit's financial position and market outlook, InvestingPro offers 17 additional tips, providing a comprehensive analysis to inform investment decisions.
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