Reddit Inc (NYSE:RDDT) shares are trading higher on Monday as traders revisit the latest earnings backdrop and lean into a risk-on tape. Here’s what investors need to know.
- Reddit shares are climbing with conviction. What’s behind RDDT gains?
What Catalyzed Reddit’s Q2 Earnings Beat?
In its most recent quarterly update, the company posted second-quarter EPS of $1.25, beating the 95 cent consensus estimate, while revenue of $804.91 million topped the $730.26 million Street view and rose from $499.6 million in the same period last year.
Management also pointed to user growth (DAUq up 18% to 130.3 million; WAUq up 24% to 514.6 million) alongside 91.3% gross margin and adjusted EBITDA of $343 million.
Reddit’s second-quarter ad engine was a key support point, with advertising revenue up 64% year over year to $762 million and “other revenue” up 24% to $43 million. Management also flagged active advertisers rising more than 70% year over year, with Ads API revenue up more than 40% sequentially.
Reddit ended the quarter with $2.8 billion in cash, cash equivalents and marketable securities. The company repurchased approximately 1.5 million shares during the quarter for $235 million, leaving about $760 million available under its current share repurchase authorization.
Critical Levels To Watch For RDDT Stock
Even after Monday’s pop, Reddit is still in a longer-term repair phase: it’s trading 18.6% below its 20-day SMA ($181.81), 15.5% below its 50-day SMA ($175.24), and 17.7% below its 200-day SMA ($179.83). That positioning keeps rallies vulnerable to supply as the stock tries to reclaim broken trend levels from earlier in the year.
Momentum also isn’t fully confirming a sustained upside push yet: MACD is below its signal line and the histogram is negative, which points to upside pressure cooling versus the prior upswing. In plain terms, MACD below the signal line often means rebounds can fade unless buyers can rebuild momentum quickly.
The bigger-picture trend signal remains mixed after the death cross in March (50-day SMA below the 200-day SMA), even though the 20-day SMA is still above the 50-day SMA (a shorter-term bullish tilt). From a structure standpoint, the stock is also well off its 52-week high of $282.95 and remains closer to the lower end of the range after the 52-week low was set in March.
- Key Resistance: $161.50 — close to the 100-day SMA area ($161.90), a zone that can cap rebounds if sellers defend the intermediate trend line
- Key Support: $143.00 — a nearby floor just below the current price where buyers may try to hold the recent bounce
Reddit’s Edge Rankings Explained
Below is the Benzinga Edge scorecard for Reddit, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Weak (Score: 8.89) — Despite today’s bounce, the broader trend profile remains soft versus the market.
- Value: Neutral (Score: 36.75) — The stock doesn’t screen as cheap, and valuation can stay a headwind if growth expectations cool.
- Growth: Strong (Score: 97.53) — The market is still rewarding the company’s growth profile, which can support rallies when risk appetite improves.
The Verdict: Reddit’s Benzinga Edge signal reveals a growth-heavy profile with weak momentum, which often translates to sharp bounces that still need technical confirmation. For longer-term bulls, the setup improves if the stock can reclaim key moving averages; for traders, failed rallies into resistance remain a risk while momentum stays depressed.
RDDT Stock Price Movement on Monday
RDDT Stock Price Activity: Reddit shares were up 6.06% at $149.19 at the time of publication on Monday, according to Benzinga Pro data.
Image: Shutterstock
