What Happened?
Shares of online community and discussion platform Reddit (NYSE: RDDT) jumped 13.3% in the afternoon session after the company reported better-than-expected first-quarter results and provided a strong forecast for the current quarter.
The social media platform announced that its first-quarter revenue jumped 69.1% year-over-year to $663.4 million, easily surpassing Wall Street's estimates. This impressive growth was fueled by a massive 153% year-over-year increase in domestic daily active visitors, which reached 126.8 million.
The company's profitability also beat expectations, with its GAAP earnings per share of $1.01 crushing analyst forecasts by over 79%. Looking ahead, Reddit projected second-quarter revenue with a midpoint of $720 million, which was also above consensus estimates, signaling confidence in its continued momentum.
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What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. But moves this big are rare even for Reddit and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 2.9% on the news that DA Davidson initiated coverage on the company with a buy rating and a $200 price target, signaling confidence in its future growth.
The analyst noted that Reddit is currently under-monetized compared to its peers and is well-positioned as a 'human-first' social platform, which should continue to draw in more users and advertisers.
Reddit is down 28.6% since the beginning of the year, and at $172.70 per share, it is trading 36.2% below its 52-week high of $270.71 from September 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $3,424.
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