Reddit Inc (NYSE:RDDT) is seeing a modest decrease in its share price on Thursday as investors anticipate the company's release of its fourth-quarter earnings report scheduled for after the market closes today. The stock's movement appears subdued, reflecting market caution ahead of the upcoming financial disclosure.
Analyst projections suggest that Reddit will report earnings of 94 cents per share on revenue approximating $667.29 million. This outlook follows the company's recently published previous quarter results that demonstrated robust growth metrics and investor optimism about Reddit's performance trajectory.
In the preceding quarter, Reddit posted revenue of $585 million, marking a 68% increase year-over-year, alongside earnings per share of 80 cents — a figure that exceeded consensus expectations. Net income surged to $163 million from $30 million the previous year, showcasing significant profitability improvement. Additionally, the adjusted EBITDA reached $236 million, reflecting a 40% margin, underscoring the company's operational efficiency.
User engagement and advertising revenue metrics further echoed this positive momentum. Daily active unique users expanded by 19% year-over-year to 116 million, while advertising revenue saw a 74% increase, pointing to sustained growth in Reddit’s core audience and monetization capabilities.
Looking ahead, Reddit forecasted fourth-quarter revenue guidance between $655 million and $665 million, with an expected adjusted EBITDA range of $275 million to $285 million. Such projections indicate management's anticipation of continued financial growth despite competitive and market challenges.
From a technical analysis perspective, Reddit’s stock currently occupies a bearish positioning. It trades well below critical moving averages, suggesting a lack of upward momentum and a need for caution among traders and investors considering entry or accumulation at present levels.
The Relative Strength Index (RSI) for Reddit stands at 21.83, which places the stock firmly in oversold territory. While this condition sometimes precedes a price rebound, it also highlights ongoing selling pressure and downside risks. Complementing this view, the Moving Average Convergence Divergence (MACD) is below its signal line, reinforcing the bearish momentum observed in the shorter term.
Key technical support for Reddit shares is found at $138.00, whereas resistance levels are identified near $164.50. A decline towards or through the support level could signal further decreases in price, while surpassing resistance might represent the first indication of a potential reversal in the prevailing downtrend.
Over the last twelve months, Reddit's share price has decreased by approximately 30.92%, reflecting a challenging year and contributing to the prevailing bearish outlook on the stock. The shares currently trade substantially below their historical highs, underscoring the extent of these challenges.
At the time of reporting, Reddit shares were valued at $152.20, down 0.32% from the previous close, indicating limited immediate market reaction ahead of the earnings announcement.