Rainbows and Unicorns: Reddit, Inc. (NYSE:RDDT) Analysts Just Became A Lot More Optimistic

Shareholders in Reddit, Inc. (NYSE:RDDT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Reddit too, with the stock up 26% to US$189 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

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Following the upgrade, the latest consensus from Reddit's 26 analysts is for revenues of US$2.1b in 2025, which would reflect a sizeable 24% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 61% to US$1.86. Prior to this update, the analysts had been forecasting revenues of US$1.9b and earnings per share (EPS) of US$1.26 in 2025. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Reddit

With these upgrades, we're not surprised to see that the analysts have lifted their price target 27% to US$194 per share.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Reddit's rate of growth is expected to accelerate meaningfully, with the forecast 53% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 35% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Reddit to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Reddit.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Reddit going out to 2027, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.