Reddit, Inc. Class A (RDDT)
NYSE:RDDT
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Reddit Inc Class A
(NYSE:RDDT)
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Rating:79Outperform
Price Target:
$162.00
▼(-1.10% Downside)
Action:Reiterated
Date:05/02/26
The score is driven primarily by strong financial performance (high margins, profitable inflection, strong free cash flow, and very low leverage) and a constructive earnings outlook with robust growth and profitability guidance. Offsetting factors are mixed technicals (below longer-term moving averages) and a growth-priced valuation (P/E ~31.6) without dividend yield support.
Positive Factors
Balance Sheet Strength
Extremely low leverage and a conservative balance sheet give Reddit durable financial flexibility to fund product and international investments, absorb ad-market cycles, or return capital. A strong equity base and improved ROE support resilience and lower refinancing risk over the next 2–6 months.
Negative Factors
User Engagement & Retention
Lower daily-use frequency and the need to convert weekly users into daily active users limit the sustainable growth of ad impressions per user. If retention and onboarding experiments fail to scale, revenue upside could slow despite monetization gains, making long-term growth contingent on product improvements.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
Extremely low leverage and a conservative balance sheet give Reddit durable financial flexibility to fund product and international investments, absorb ad-market cycles, or return capital. A strong equity base and improved ROE support resilience and lower refinancing risk over the next 2–6 months.
Read all positive factors
Reddit Inc Class A Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows how much revenue comes from each country or region, revealing where Reddit monetizes best, which markets drive growth, and where exposure to local ad markets or regulatory change could pose risk.
Shows how much revenue comes from each country or region, revealing where Reddit monetizes best, which markets drive growth, and where exposure to local ad markets or regulatory change could pose risk.
Data provided by:
The Fly
The FlyReddit Inc Class A (RDDT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.88B
Dividend YieldN/A
Average Volume (3M)5.31M
Price to Earnings (P/E)47.6
Beta (1Y)2.27
Revenue Growth70.64%
EPS Growth477.34%
CountryUS
Employees2,233
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)3.74
Shares Outstanding141,965,640
10 Day Avg. Volume5,271,334
30 Day Avg. Volume5,314,521
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 Cap0.96
Enterprise Value/Revenue13.14
Enterprise Value/Gross Profit14.38
Enterprise Value/Ebitda49.62
Forecast
1Y Price Target
$216.55Price Target Upside32.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)4.93
Revenue Forecast (FY)$3.22B
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 (1) advertising and (2) data licensing/other services, with a smaller contribution from user subscriptions.
1) Advertising revenue: Reddit sells digital advertising across its platform, including performanc...
Reddit Inc Class A Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call emphasized strong commercial momentum: very high revenue growth (+69% YoY), robust margins (91.5% gross, ~40% adjusted EBITDA), significant cash generation and clear monetization improvements (ARPU +44%, active advertisers +75% YoY). Management acknowledged important product and engagement work remaining—particularly raising daily active usage, new user retention and app performance—while continuing measured investments in sales, ML and marketing. Financial results, cash position, and product monetization trends dominate positively, with user engagement and some cost/investment timing noted as areas to address.Positive Updates
Strong Revenue Growth
Q1 total revenue of $663M, up 69% year-over-year; advertising revenue $625M, up 74% YoY. This marks Reddit's seventh consecutive quarter with revenue growth over 60%.
Negative Updates
User Engagement and DAU Frequency Challenges
Management highlighted that increasing user frequency and retention remains a priority and opportunity — U.S. DAU was ~50M with a stated goal of reaching 100M U.S. daily users, indicating significant work required on retention and product quality.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue Growth
Q1 total revenue of $663M, up 69% year-over-year; advertising revenue $625M, up 74% YoY. This marks Reddit's seventh consecutive quarter with revenue growth over 60%.
Read all positive updates
Company Guidance
Reddit guided Q2 2026 revenue of $715–725 million (midpoint ≈ $720M), implying 43%–45% year‑over‑year growth (mid ≈ 44%) after lapping a strong Q2 2025, and adjusted EBITDA of $285–295 million (≈71%–77% YoY growth) which corresponds to about a 40% adjusted EBITDA margin at the midpoint; the company expects total adjusted costs of roughly $430 million (implying ≈29% YoY cost growth), cautioned that stock‑based‑compensation‑related tax expense will be sequentially higher due to hiring and the mid‑Q2 annual stock refresh, and said SBC expense could grow at roughly half the rate of revenue for the quarter, while also noting it will discontinue logged‑in/logged‑out DAUq disclosures after Q2 and will continue reporting U.S. and international DAUq and WAUq beginning in Q3.Reddit Inc Class A Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
89
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.47B | 2.20B | 1.30B | 804.03M | 666.70M | 484.92M |
| Gross Profit | 2.26B | 2.01B | 1.18B | 693.02M | 561.90M | 412.35M |
| EBITDA | 655.01M | 457.93M | -544.92M | -126.46M | -164.16M | -124.40M |
| Net Income | 707.54M | 529.72M | -484.28M | -90.82M | -158.55M | -127.90M |
Balance Sheet | ||||||
| Total Assets | 3.48B | 3.24B | 2.34B | 1.60B | 1.60B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 2.77B | 2.48B | 1.84B | 1.21B | 1.27B | 1.41B |
| Total Debt | 21.29M | 23.21M | 26.70M | 25.75M | 19.49M | 13.46M |
| Total Liabilities | 304.57M | 310.13M | 205.85M | 155.90M | 125.28M | 77.63M |
| Stockholders Equity | 3.18B | 2.93B | 2.13B | 1.44B | 1.47B | 1.57B |
Cash Flow | ||||||
| Free Cash Flow | 868.73M | 684.17M | 215.82M | -84.84M | -100.25M | -132.49M |
| Operating Cash Flow | 875.55M | 690.88M | 222.07M | -75.11M | -94.02M | -130.19M |
| Investing Cash Flow | -66.56M | -218.89M | -440.69M | 41.29M | -804.18M | 170.68M |
| Financing Cash Flow | -70.36M | -80.56M | 379.54M | -811.00K | -3.78M | 1.18B |
Reddit Inc Class A Technical Analysis
Positive
163.80
Price Trends
150.66
Positive
162.26
Positive
191.44
Negative
Market Momentum
1.81
Negative
63.23
Neutral
88.25
Negative
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 163.8 is above the 20-day moving average (MA) of 158.44, above the 50-day MA of 150.66, and below the 200-day MA of 191.44, indicating a neutral trend. The MACD of 1.81 indicates Negative momentum. The RSI at 63.23 is Neutral, neither overbought nor oversold. The STOCH value of 88.25 is Negative, 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 0 New Risks
Reddit Inc Class A Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.88B | 47.60 | 25.48% | ― | 70.64% | 477.34% | |
74 Outperform | $1.25B | 9.65 | 19.70% | ― | 2.09% | 4.03% | |
71 Outperform | $8.43B | 13.23 | -286.13% | 2.32% | 2.00% | 30.81% | |
67 Neutral | $11.23B | 38.18 | 7.76% | ― | 16.30% | -82.47% | |
64 Neutral | $804.73M | -18.69 | -10.32% | ― | 6.78% | 52.54% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
53 Neutral | $9.46B | -23.51 | -18.93% | ― | 10.26% | 23.77% |
* Communication Services Sector Average
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Reddit Inc Class A
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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.