Reddit's stock (RDDT) plummeted 5.01% on Tuesday during intraday trading session in anticipation of the company's Q4 earnings report scheduled after the market close.
While Reddit has consistently exceeded Wall Street's revenue estimates since going public, the social media company's growth may be slowing down based on analysts' projections. For Q4, analysts expect Reddit's revenue to grow by 63.7% year-over-year to $408.9 million, a deceleration from the 67.9% growth rate in the previous quarter.
The slowdown in revenue growth, coupled with macroeconomic headwinds and intense competition in the social media space, has likely fueled concerns among investors about Reddit's ability to maintain its rapid expansion. As a result, traders may have chosen to take profits ahead of the earnings release, leading to the stock's plummet on Tuesday.
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