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Reddit Stock Soars: Time to Buy?

Ellis HobbsAvatar
Written by Ellis Hobbs Reviewed by Jack Kellogg Fact-checked by Tim Sykes
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Reddit Inc.’s stock price movement is most influenced by news of a major new partnership with a tech giant, causing a wave of investor optimism. On Tuesday, Reddit Inc.’s stocks have been trading up by 14.84 percent.

Key Market Highlights

  • Tiger Global Management boosts its stake in major companies, including Reddit, suggesting confidence in these stocks’ growth potential.

Candlestick Chart

Live Update At 17:02:59 EST: On Tuesday, March 11, 2025 Reddit Inc. stock [NYSE: RDDT] is trending up by 14.84%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • A revised price target for Reddit by Loop Capital shows optimism in its financial performance, despite a slight dip in U.S. daily active users attributed to technical issues.

  • Roth MKM retains a Neutral rating on Reddit but notes notable earnings with concerns over potential revenue slowdown due to external factors.

Reddit Inc.’s Financial Overview

Tim Sykes, a millionaire penny stock trader and teacher, emphasizes the importance of being well-prepared and patient in the trading world. As trading often requires careful analysis and timing, his adage rings true: “Preparation plus patience leads to big profits.” It’s not just about jumping into trades impulsively, but about doing thorough research and waiting for the right moment to act, thereby increasing the likelihood of substantial returns.

Reddit has recently made noise with its latest financial results, capturing attention across the market. The company saw its revenue spike by 71%, demonstrating strong growth despite recent hurdles, like the Google algorithm changes impacting user stats. The EBITDA margins held solid at 36%, showing operational efficiency. Profitability measures, however, revealed struggles; particularly, a pretax profit margin of -54.1 which hints at pressures in converting revenue to profit. Its enterprise value is noted at $17.59 billion, indicating significant market valuation.

Digging into the company’s structure, it emerges that Reddit maintains a current ratio showcasing its ability to manage short-term liabilities efficiently. Yet, challenges remain with a total debt to equity ratio undisclosed, leaving potential investors wary about long-term obligations. On the technology front, Reddit’s partnership with Intercontinental Exchange (ICE) puts it in a strategic position to leverage financial industry trends.

Reddit also stays dynamic in its asset management with cash and equivalents amounting to $562 million, reflecting a comfortable liquidity position. Despite a substantial amount reflecting retained earnings, the company’s return on equity stands at -24.13, reflecting areas for improvement in translating equity investment into net income.

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The crux of understanding Reddit’s current and future stock movement involves interpreting this patchwork of financial dashboards and market maneuvers. Investors, at times akin to treasure hunters, must sift through this maze of revenue, ratios, and reports to gauge Reddit’s true potential.

Decoding the Market Buzz

Recent innovations in Reddit’s operations have catalyzed market discussion. The engagement with Tiger Global hints at sections of robust investor faith, as they increase stakes amidst market oscillations. Such strategic foreplay suggests careful planning and anticipation from a financial powerhouse.

Meanwhile, Loop Capital’s move to raise Reddit’s price target reflects sustained financial confidence. This comes against the backdrop of Reddit’s slight user dip due to tech glitches, addressing how the situation was promptly managed – a testament to Reddit’s ability to adapt and improvise under unforeseen circumstances. Such resilience captures market interest, emphasizing competence in tackling sudden variables.

Remarkably, Roth MKM’s stance on Reddit’s earnings observed robust performance, yet conveys apprehensions about a potential dip in revenue by the year’s second half. The forecast is tinged with caution but does not overshadow Reddit’s ability to achieve an unequivocal earnings beat, an indicator of operational grit.

Still, the question looms: Is Reddit, with its complex matrix of impressive growth juxtaposed against noteworthy challenges, a promising stock to buy now? Or will external pressures sculpt a fleeting triumph into a calm retreat? While Reddit continues to defy odds, market watchers remain attentive to how this intricate narrative unfolds with future reports.

Conclusion

In this kaleidoscope of Wall Street disruptions and recalibrations, Reddit represents a modern paradox – a vibrant hub with impressive earnings revealed against a silhouette of ever-present market skeins. A vibrant blend of financial metrics and cautious optimism signals a worthy contender, albeit one set against a horizon peppered with strategic decisions.

In conclusion, Reddit stands as an intriguing prospect. Navigating these tides calls for strategic insight and a keen eye, offering adeptness that lays beyond simply interpreting numbers. As millionaire penny stock trader and teacher Tim Sykes says, “You must adapt to the market; the market will not adapt to you.” For the discerning trader, only the story that tomorrow unravels will reveal if today’s audacity was indeed foretelling an inspiring narrative – or merely a fleeting chapter in the chronicles of finance.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”