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Reddit Stock Drops 6% as Investors Brace for Q3 Earnings Report
Reddit (RDDT) shares slid approximately 6.0% in mid-day trading on Monday to $135.67, as investors de-risked their positions ahead of the company's third-quarter earnings report, scheduled for release after the market closes on Thursday, October 29.
Pre-Earnings Jitters Take Hold
The sell-off reflects investor anxiety rooted in the company's own guidance, which pointed to a deceleration in revenue growth. This contrasts with the rapid expansion seen in previous quarters and creates a high bar for the upcoming results. According to Investing.com, consensus estimates project Q3 revenue of approximately $877 million and earnings per share of $1.35.
This week's caution is informed by recent history. Following its second-quarter 2026 results, Reddit's stock fell sharply despite beating estimates, as the market focused on a sequential decline in U.S. daily active users and management's comments on inconsistent search traffic referrals from Google.
Analyst Bullishness Fails to Stem Decline
AdDespite the negative sentiment, some Wall Street analysts remain optimistic. Truist Securities reiterated a Buy rating with a $275 price target, and Evercore ISI maintained its Outperform rating with a $265 target. Both firms projected robust year-over-year revenue growth of around 50%.
However, these bullish calls did little to support the stock on Monday. The share price decline occurred even as the broader market advanced, with both the S&P 500 and Nasdaq in positive territory. The stock's technical posture also remains weak, trading well below its 20-day, 50-day, 100-day, and 200-day moving averages, according to the source material.
Context and Market Backdrop
Monday's decline highlights persistent investor questions about the durability of Reddit's U.S. user growth and its reliance on Google for traffic. The stock's weakness was notable within the Communication Services sector, which was one of the few S&P 500 sectors trading lower. Investors are also monitoring macroeconomic events, including an upcoming Federal Reserve policy decision, though markets are pricing in a low probability of an interest rate change at this meeting.
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