Online community and discussion platform Reddit (NYSE:RDDT) will be announcing earnings results tomorrow after the bell. Here’s what to expect.
Reddit beat analysts’ revenue expectations by 11.6% last quarter, reporting revenues of $348.4 million, up 67.9% year on year. It was a strong quarter for the company, with EBITDA guidance for next quarter exceeding analysts’ expectations. It reported 48.2 million daily active users, up 50.6% year on year.
Is Reddit a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Reddit’s revenue to grow 63.7% year on year to $408.9 million, improving from the 24.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.70 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Reddit has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time since going public by 11.9% on average.
Looking at Reddit’s peers in the social networking segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Snap delivered year-on-year revenue growth of 14.4%, beating analysts’ expectations by 0.6%, and Pinterest reported revenues up 17.6%, topping estimates by 1.2%. Snap traded down 8.6% following the results while Pinterest was up 19.1%.
Read our full analysis of Snap’s results here and Pinterest’s results here.
There has been positive sentiment among investors in the social networking segment, with share prices up 10.4% on average over the last month. Reddit is up 36% during the same time and is heading into earnings with an average analyst price target of $188.58 (compared to the current share price of $223.85).
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