Reddit Analysts Flee After 29% Earnings Crash

RDDT shed 29% in a single session after its Q3 earnings print. The stock is now down 38% over the past month and 34% in just one week, a collapse that makes every comparable peer look stationary: PINS fell 4.3% on the week, SNAP dropped 14%, and YELP gained 1.9%.

Wall Street Reassesses

The analyst retreat after earnings has been swift and broad. Evercore's Mark Mahaney cut his rating to In-Line and slashed his price target 55%, from $265 to $120. Loop Capital downgraded to Hold from Buy. Keybanc and Citizens both downgraded before results arrived, adding pre-emptive caution. JP Morgan's Doug Anmuth lowered his target to $150 from $185 while holding Neutral. Wells Fargo dropped its target to $110. Even bulls trimmed sharply: Truist cut to $210 from $275, B. Riley to $190 from $270, Guggenheim to $170 from $255. The consensus remains Buy, with a mean target of $156, but that is roughly 72% above a stock trading at $90.97. The gap between where analysts say the stock should trade and where it does reflects how quickly estimates are being revised rather than unusual optimism.

The bear case, as laid out ahead of results, centred on daily active user growth tracking 2.6 percentage points below consensus and volatile Google referral traffic. That weakness appears to have been confirmed by the print itself, given the scale of the analyst response.

Shorts Add But the Borrow Stays Cheap

Short interest climbed to 16.2% of the free float after earnings, up 14.6% over the past week to 22.3 million shares. That is a meaningful level, and it has been building: prior ORTEX notes tracked shorts adding through October even as the stock declined. The directional conviction is clear. What is absent is any mechanical pressure on those short sellers. Availability stands at 313%, meaning there are more than three shares available to lend for every one currently borrowed. Cost to borrow is 0.46%. Neither figure has tightened materially since the crash. Shorts are not being squeezed out and are not paying to stay in.

Options Tell a Different Story

The put/call ratio dropped to 0.73 on November 2, its 52-week low and 3.8 standard deviations below its 20-day mean of 0.85. Before earnings, the PCR had been running in a tight band around that mean for weeks. The post-crash reading shows a sharp swing toward calls: buyers are paying up for upside exposure even as analysts cut targets and short interest rises. The ORTEX short score edged to 60.8, its highest reading in the past two weeks, consistent with the rise in bearish positioning.

Wikipedia attention for RDDT registered a z-score of 2.83 against its own 90-day history as of October 21, well before the earnings drop, indicating elevated retail engagement at a point when the stock was already under pressure.

What to Watch

RDDT needs to close above $103.28 to reach the entry line for the December CRSP US Small index review, a level 13.5% above current prices. That date ranks the stock on December 4. The next earnings event is February 5, 2027.

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Data summary

• Price: $90.97, down 34.3% on the week, down 38.5% on the month
• Short interest: 16.2% of free float, 22.3M shares, up 14.6% week on week
• Borrow availability: 313% of outstanding short interest; cost to borrow 0.46%
• Put/call ratio: 0.7347, 3.8 standard deviations below 20-day mean; 52-week low 0.7304
• Consensus: Buy, 11 analysts; mean price target $156.05
• ORTEX short score: 60.8 (November 2)
• Next earnings: February 5, 2027