TLDR
- Bank of America cut its Reddit price target from $205 to $175, keeping a “neutral” rating
- RDDT is down 41% year-to-date, trading around $136, despite strong Q4 earnings
- Q4 revenue hit $725.6M, up 70% year-over-year, beating estimates by 9%
- CEO Steve Huffman sold ~$2.39M in stock on March 31 under a pre-arranged trading plan
- Reddit was fined £14.47M by the UK’s ICO for failing to protect children’s personal data
Reddit had a strong Q4 on paper. Revenue of $725.6 million came in 70% higher than the same period last year, beating analyst estimates by 9%. Adjusted EBITDA jumped 112% year-over-year to $327 million. EPS of $1.24 beat the $0.96 consensus by a wide margin.
But the stock tells a different story.
RDDT is down 41% year-to-date, trading around $136. That’s a long way from its 12-month high of $282.95. Bank of America trimmed its price target from $205 to $175 on Thursday, citing a neutral outlook — though even that revised target implies roughly 28% upside from current levels.
Bank of America isn’t alone in its caution. Goldman Sachs cut its target from $236 to $206 with a neutral rating back in February. Roth MKM and Robert W. Baird both hold neutral-to-hold positions as well.
Not everyone is bearish, though. Evercore maintained an outperform rating with a $290 price target. Truist Securities raised its target to $275 after Q4 results, calling it a “Classic Beat & Raise” quarter. Citizens held its market outperform rating and $300 target, pointing to 75% year-over-year advertising revenue growth in Q4.
The consensus across analysts currently sits at a “Moderate Buy” with an average price target of $240.85 — nearly double where the stock trades today.
CEO Sells, Director Buys
Insider activity has been mixed. CEO Steve Huffman sold 14,697 shares on March 31 for roughly $2.39 million, with trades executed between $126.40 and $134.84. The sale was part of a pre-arranged Rule 10b5-1 plan set up in May 2025. Huffman still holds over 490,000 shares across various trusts.
Earlier this year, Huffman also sold 18,000 shares in January at $232.78, pocketing around $4.19 million.
On the flip side, Director Sarah Farrell stepped in and bought 43,800 shares in February at $149.52 — a $6.5 million bet on the company’s recovery.
Over the last quarter, insiders sold $61.25 million worth of stock and bought $8.87 million. Insiders collectively own 34.25% of the company.
UK Regulator Hits Reddit With £14.47M Fine
Reddit also faces a regulatory headache in the UK. The Information Commissioner’s Office fined the company £14.47 million for failing to adequately protect children’s personal data. Regulators said Reddit’s age verification measures were not up to standard.
The company launched a $1 billion share buyback program alongside its Q4 results — a move that signals some confidence from management despite the stock’s slide.
Citizens flagged one concern worth watching: U.S. time spent on the platform dropped 10.5% year-over-year in January, even as ad revenue continued to climb.
Reddit’s 50-day moving average sits at $150.24, and the 200-day is at $195.96. The stock carries a beta of 2.39, meaning it moves sharply relative to the broader market — in both directions.
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