RDDT reports on July 30 with the stock down nearly 7% on the week to $168.73 — a sharper drop than the prior note's $185.84 close — while short interest and the analyst debate have both shifted in ways that make the setup more charged than it looked a week ago.
Short sellers have largely held their ground. SI is running at 11.6% of the free float, little changed from the levels flagged in earlier notes, but the monthly picture is more telling: shorts grew their position by roughly 18% over the past month, building from around 13.5 million shares in mid-June to just over 16 million today. That build happened as the stock fell from the mid-$190s, suggesting bears have been adding on weakness rather than covering into it. The borrow market still offers no friction — availability is running at 664% of current short interest, with 85 million shares available to lend, and cost to borrow is a negligible 0.37%, down 9% on the week. Squeeze risk is essentially absent. Options positioning has moved slightly more defensive into the print: the put/call ratio edged up to 0.82, about one standard deviation above its 20-day average, though the z-score of roughly 1.0 does not signal anything extreme. The setup reads as cautiously bearish rather than crowded on either side.
The analyst community is more optimistic than the price action implies. The consensus mean target of $227 is roughly 35% above Thursday's close, and recent activity has skewed constructive — Wedbush assumed coverage with an Outperform rating and a $250 target on July 16, while Wells Fargo lifted its Equal-Weight target to $187. The bull case centers on AI partnership monetization, strengthening advertiser demand, and Reddit's durable community-driven model. Bears push back on a stretched valuation — the PE multiple is running near 20x on a stock that has lost nearly 14% from its recent peak — combined with heavy reliance on ad revenue and questions about whether user growth is keeping pace with monetization ambitions. EPS momentum scores well in the 79th–85th percentile on 30- and 90-day readings, suggesting estimate revisions have been running hot, but the forward earnings growth rank sits in just the 23rd percentile, a reminder that the bar is already high.
One ownership detail adds context. CEO Steve Huffman and COO Jennifer Wong both sold shares on July 15 at prices above $195 — well above the current level — in a cluster of transactions flagged in prior notes. Those sales are now sitting on meaningful unrealised gains relative to the stock's subsequent slide, which adds a layer of interest to whether management commentary on July 30 reflects the same confidence the selling price implied.
The print will test whether Reddit's AI-linked revenue narrative and advertiser momentum can justify a multiple that the stock's recent price decline has only partially deflated.
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