CWEB analysts follow the stock market closely and can estimate that Reddit stock will continue to rise in the foreseeable future. The social media firm recently posted its quarterly results and beat Wall Street analysts estimates. The company mentioned an optimistic future forecast, and growth in advertising leading to a bump in its share price. Many analysts including CWEB call the stock bullish.
Reddit’s revenue stood at $585 million in the third quarter, and this is a surge of 68 percent when compared to the same quarter a year ago. It also beat the LSEG estimate of $546 million. Analysts polled by LSEG had forecast 51 cents earnings per share while the social media company reported a higher EPS of 80 cents.
The company has also released a positive sales outlook between $655 million and $665 million for the next quarter; beating analysts’ estimate of $638 million. It also reported an increase in the number of daily active users at 116 million that is higher than the 114 million daily users forecast by Wall Street and is also a 19 percent increase from a year ago.
The third quarter report also revealed that nine of the top 15 advertiser verticals of the company saw an over 50 percent jump in growth.
Reddit also has other revenue making methods other than advertising. It has data licensing partnerships with Google and OpenAI. Revenue from these partnerships grew to $36 million. This is a 7 percent increase from a year ago.
Reddit has some concerns that AI chat apps such as ChatGPT and Google’s AI overview might affect future user growth. CEO Steve Huffman commented on this matter.
During the earnings call Huffman said, “I’m looking forward to continuing to work on these things with these partners, but they are not a major traffic driver today. But I think there’s plenty of opportunity there as we continue to work together.”
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