Reddit Inc (RDDT  ) will be reporting its first-quarter earnings on Tuesday. Wall Street expects -$8.71 in EPS and $212.83 million in revenues as the company reports after market hours.

The company is known for being a social news aggregation, web content rating, and discussion website. It's often referred to as "the front page of the internet" because of its wide-ranging and diverse user-generated content. On March 21, Reddit's stock started trading on the NYSE.

This is the first time the company is reporting earnings after going public.

  • Bank of America analyst Justin Post has reiterated Neutral with the price target raised from $46 to $50 a share.
  • JMP analyst Andrew Boone has a Market Outperform rating on Reddit stock with a price target of $53 a share.
Here's what the analysts are anticipating from the Q1 earnings release, what they will be focusing on, and how the stock currently maps against Wall Street estimates.

BofA Securities on Reddit

Post believes that strong growth in advertising across peer platforms, including Google search, and benefits from Leap year/Easter timing, could lead to upside.

The estimated daily active users (DAUs) stand at 77 million, up 28% year-over-year, with potential for upside based on Sensor Tower data.

Looking ahead, BofA raises revenue and EBITDA estimates for 2024 and 2025, citing higher user growth and monetization.

Despite the positive outlook, BofA maintains a Neutral rating for Reddit due to its current valuation. The price target is based on a 6.5x EV/Revenue multiple for 2025.

"Our 6.5x multiple represents a slight premium to our comp group median of 6x, given Reddit's higher revenue growth today, upside potential with AI data licensing business, and significant long-term opportunity to grow ARPU," said Post.

JMP on Reddit

Boone notes that Reddit's time spent and daily active users (DAU) have accelerated, with U.S. time spent growing at +29% YoY and global growth at +30% YoY. DAU growth has also accelerated each month in 2024, alongside healthy browser data indicating strong global website visits.

  • Boone believes that Reddit's strong engagement trends suggest its "its first public earnings report will be a strong
  • beat and raise." He highlighted "healthy engagement trends, an improving ad platform, and a healthy advertising
  • environment" as key catalysts enabling this. Boone expects strong advertising revenue in 1Q24, which should lead to profitability.

Reddit Analysts' Consensus Rating

Ratings & Consensus Estimates: The consensus analyst rating on Reddit stock stands at a Buy currently with a price target of $49.86.

RDDT Price Action: Reddit stock was trading at $49.25 at the time of publication.