Reddit Inc Class A (RDDT)
NYSE:RDDT
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Reddit Inc Class A
(NYSE:RDDT)
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Rating:72Outperform
Price Target:
$172.00
▲(11.30% Upside)
Action:ReiteratedDate:02/07/26
RDDT scores well on fundamentals and the latest earnings outlook, driven by a sharp profitability/cash-flow turnaround, very low leverage, and upbeat guidance supported by strong ad momentum. The score is held back mainly by weak technicals (price far below major moving averages with bearish MACD) and a premium valuation (P/E ~52.5) that leaves less room for execution missteps.
Positive Factors
Robust revenue and user growth
Sustained high revenue growth and expanding DAU reflect deeper product-market fit and broader advertiser reach. Durable top-line expansion supports scale benefits for ad targeting, increases ARPU opportunities, and creates a larger, more attractive audience for long-term advertiser investment.
Negative Factors
Search & shopping monetization nascent
Key revenue diversification avenues remain early and unproven at scale; failure to monetize search/shopping would concentrate growth on core feed ads. Structural reliance on nascent products increases execution risk and could slow sustained revenue acceleration if adoption lags.
Read all positive and negative factors
Positive Factors
Negative Factors
Robust revenue and user growth
Sustained high revenue growth and expanding DAU reflect deeper product-market fit and broader advertiser reach. Durable top-line expansion supports scale benefits for ad targeting, increases ARPU opportunities, and creates a larger, more attractive audience for long-term advertiser investment.
Read all positive factors
Reddit Inc Class A (RDDT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.53B
Dividend YieldN/A
Average Volume (3M)4.51M
Price to Earnings (P/E)80.9
Beta (1Y)2.34
Revenue Growth69.71%
EPS GrowthN/A
CountryUS
Employees2,233
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.24
Shares Outstanding139,649,500
10 Day Avg. Volume3,396,652
30 Day Avg. Volume4,506,550
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)14.63
Price to Sales (P/S)19.45
P/FCF Ratio62.62
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue13.33
Enterprise Value/Gross Profit14.62
Enterprise Value/Ebitda61.16
Forecast
1Y Price Target
$227.10Price Target Upside46.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
EPS Forecast (FY)4.14
Revenue Forecast (FY)$3.14B
Reddit Inc Class A Business Overview & Revenue Model
Company Description
Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replyi...
How the Company Makes Money
Reddit primarily generates revenue from advertising sold on its platform. Advertising includes placements that appear in user feeds and other surfaces and is typically sold through a mix of self-serve and managed channels, with targeting and measu...
Reddit Inc Class A Key Performance Indicators (KPIs)
Any
Revenue by Geography
Allocates revenue to specific regions to clarify which parts of the world drive financial results, illuminate reliance on particular markets, and assess the success of international monetization strategies.
Allocates revenue to specific regions to clarify which parts of the world drive financial results, illuminate reliance on particular markets, and assess the success of international monetization strategies.
Data provided by:
The Fly
The FlyReddit Inc Class A Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based revenue growth, expanding advertiser adoption, significant profitability and cash generation, and measurable product/ML-led improvements that are driving ad performance. Key achievements include 69% full-year revenue growth to $2.2B, record profitability and free cash flow, rapid advertiser growth, and promising early returns from new ad products (Reddit Max, DPA). Challenges include elevated operating expense growth driven by hiring and marketing, mixed early results from onboarding experiments, nascent monetization of search and shopping, and ongoing risks from AI-generated content/bots. Despite these challenges, the balance of large-scale growth, high margins, cash generation, and product momentum outweighs the lowlights.Positive Updates
Record Revenue and Rapid Top-Line Growth
Full-year 2025 revenue crossed $2.2 billion, up 69% year over year. Q4 revenue was $726 million, up 70% year over year, with ad revenue of $690 million (up 75% YoY). ARPU grew 42% YoY to $5.98.
Negative Updates
Elevated Expense Growth and Increased Marketing Spend
Q4 total adjusted costs were $399 million, up 46% YoY (higher than prior-quarter averages around 38%). Adjusted OpEx was $340 million in Q4, up 41% YoY, driven by hiring and higher user & brand marketing (mid-single-digit % of Q4 revenue).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Rapid Top-Line Growth
Full-year 2025 revenue crossed $2.2 billion, up 69% year over year. Q4 revenue was $726 million, up 70% year over year, with ad revenue of $690 million (up 75% YoY). ARPU grew 42% YoY to $5.98.
Read all positive updates
Company Guidance
Reddit guided Q1 2026 revenue of $595–$605 million (up 52%–54% YoY, midpoint ≈53%) and adjusted EBITDA of $110–$220 million (≈82%–91% YoY growth) with an implied adjusted EBITDA margin of ~36% at the midpoint; the quarter guide implies a total adjusted cost base of $385 million (down sequentially from Q4). Management expects stock‑based compensation in 2026 to be in the high‑teens percent of revenue (SBC was $387 million, ~18% of revenue in 2025), with nominal SBC rising each quarter and dilution targeted at the low end of their 1%–3% medium‑term guide. Capital priorities remain investing in the business, M&A, and opportunistic buybacks (board authorized a $1 billion repurchase program) while maintaining >$1 billion cash on the balance sheet (cash was ≈$2.5 billion at year‑end); they also said they will phase out logged‑in vs logged‑out reporting starting Q3 2026 while continuing to report U.S. and international DAU/WAU.Reddit Inc Class A Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.20B | 1.30B | 804.03M | 666.70M | 484.92M |
| Gross Profit | 2.01B | 1.18B | 693.02M | 561.90M | 412.35M |
| EBITDA | 457.93M | -544.92M | -126.46M | -164.16M | -124.40M |
| Net Income | 529.72M | -484.28M | -90.82M | -158.55M | -127.90M |
Balance Sheet | |||||
| Total Assets | 3.24B | 2.34B | 1.60B | 1.60B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 2.48B | 1.84B | 1.21B | 1.27B | 1.41B |
| Total Debt | 23.21M | 26.70M | 25.75M | 19.49M | 13.46M |
| Total Liabilities | 310.13M | 205.85M | 155.90M | 125.28M | 77.63M |
| Stockholders Equity | 2.93B | 2.13B | 1.44B | 1.47B | 1.57B |
Cash Flow | |||||
| Free Cash Flow | 684.17M | 215.82M | -84.84M | -100.25M | -132.49M |
| Operating Cash Flow | 690.88M | 222.07M | -75.11M | -94.02M | -130.19M |
| Investing Cash Flow | -218.89M | -440.69M | 41.29M | -804.18M | 170.68M |
| Financing Cash Flow | -80.56M | 379.54M | -811.00K | -3.78M | 1.18B |
Reddit Inc Class A Technical Analysis
Positive
154.54
Price Trends
142.18
Positive
182.73
Negative
192.37
Negative
Market Momentum
0.08
Negative
60.72
Neutral
77.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDDT, the sentiment is Positive. The current price of 154.54 is above the 20-day moving average (MA) of 138.42, above the 50-day MA of 142.18, and below the 200-day MA of 192.37, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 60.72 is Neutral, neither overbought nor oversold. The STOCH value of 77.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RDDT.
Reddit Inc Class A Risk Analysis
Reddit Inc Class A disclosed 49 risk factors in its most recent earnings report. Reddit Inc Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We cannot guarantee that our share repurchase program will be fully implemented or that such program will enhance the long-term value of the share price of our Class A common stock. Q4, 2025
Reddit Inc Class A Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $28.53B | 80.88 | 20.89% | ― | 69.71% | ― | |
71 Outperform | $1.53B | 13.22 | 19.96% | ― | 5.35% | 33.74% | |
68 Neutral | $11.55B | 41.90 | 8.74% | ― | 16.79% | 819.94% | |
65 Neutral | $7.72B | 12.77 | -275.39% | 2.32% | -0.46% | -2.75% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
53 Neutral | $8.70B | -29.98 | -20.72% | ― | 11.75% | 49.19% | |
51 Neutral | $542.82M | ― | -12.56% | ― | 6.65% | 50.32% |
* Communication Services Sector Average
RDDT
Reddit Inc Class A
154.54
59.16
62.03%
YELP
Yelp
26.19
-7.36
-21.94%
SNAP
Snap
5.60
-2.14
-27.65%
PINS
Pinterest
18.70
-6.75
-26.52%
MTCH
Match Group
33.59
5.61
20.03%
NXDR
Nextdoor Holdings
1.44
-0.04
-2.70%
Reddit Inc Class A Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Reddit Launches Major Share Buyback After Strong 2025 Results
Positive
Feb 5, 2026
On February 5, 2026, Reddit reported strong fourth-quarter and full-year 2025 results, highlighted by a 70% year-over-year increase in Q4 revenue to $726 million and a 69% increase in full-year revenue to $2.2 billion, driven largely by surging ad...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.