Reddit Inc RDDT is set to unveil its fourth-quarter earnings on Wednesday. Analysts anticipate the company will report earnings per share (EPS) of 25 cents and revenues of $405.26 million after the market closes.

Over the past year, Reddit’s stock has surged by 331.23%, demonstrating a year-to-date increase of 31.1%.

Reddit Faces Challenges in Lead-Up to Earnings

Tensions Mount as Musk Challenges Reddit’s Operations

As Reddit prepares for its upcoming earnings report, tensions are rising with billionaire Elon Musk. Musk claims that Reddit allows threats against his employees, which has led to increased scrutiny. Musk is the owner or co-owner of Tesla, SpaceX, X, The Boring Company, Neuralink, and xAI.

This ongoing conflict has led to subreddit bans and protests, yet Reddit’s stock performance remains strong, reflecting a 330% increase over the past year. With Ark Invest reducing its holdings and Musk provoking controversy, investors will be watching closely to see if earnings can maintain the stock’s upward trend or if the situation will create volatility.

Next, we’ll analyze Reddit’s current stock performance against Wall Street’s estimates.

Read Also: Reddit Q4 Earnings Preview: Will the Recently Public Company Continue Its Streak of Beating Estimates?

Stock Showing Moderate Optimism Before Earnings Report

Currently priced at $213, Reddit’s stock is exhibiting a moderately bullish trend. The share price is above significant long-term moving averages, indicating strength. However, the stock is experiencing some selling pressure, which could suggest the potential for a downturn.

Chart created using Benzinga Pro

The stock currently sits just below its eight-day simple moving average (SMA) of $216.53, signaling a short-term bearish trend. Nevertheless, Reddit remains above its 20-day SMA of $198.28 and its 50-day SMA of $178.49, both of which suggest a more bullish medium- to long-term outlook. Furthermore, the stock exceeds its 200-day SMA of $98.39, indicating a robust technical position overall.

The Moving Average Convergence Divergence (MACD) provides a value of 13.23, suggesting Reddit stock is still in a bullish phase. However, with a Relative Strength Index (RSI) of 63.24, the stock is nearing overbought territory, prompting investors to be alert for possible pullbacks or volatility.

Analysts Predict Potential Decline for Reddit Stock

Ratings & Consensus Estimates: Analysts currently have a Buy rating on Reddit stock, with an average price target of $159.91. Recent ratings from Raymond James and JMP Securities indicate a potential 3.43% downside for the stock, suggesting a price target of $210.

RDDT Stock Price Action: At the time of publication, Reddit stock was trading at $225.47.

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