Reddit, Inc. Class A (RDDT)
NYSE:RDDT
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Reddit Inc Class A
(NYSE:RDDT)
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Rating:82Outperform
Price Target:
$207.00
▲(26.37% Upside)
Action:Reiterated
Date:06/11/26
RDDT scores well primarily due to strong financial performance (high margins, robust free cash flow, and very low leverage) reinforced by upbeat guidance and monetization momentum from the latest earnings call. The score is tempered by a premium valuation (P/E ~48, no dividend yield provided) and mixed technicals with the stock still below its 200-day average.
Positive Factors
High Gross Margins & Profitability
Sustained ultra-high gross margins and recent positive net margins indicate a capital-light, scalable business model where incremental revenue materially drops to the bottom line. Over 2–6 months this supports durable cash generation and reinvestment flexibility if ad monetization holds.
Negative Factors
DAU Frequency & Retention Shortfall
Management explicitly cites daily user frequency and retention as a central product challenge; failure to convert weekly users to daily users limits long-term monetization per user. Without durable retention gains, ad ARPU growth may be harder to sustain over quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High Gross Margins & Profitability
Sustained ultra-high gross margins and recent positive net margins indicate a capital-light, scalable business model where incremental revenue materially drops to the bottom line. Over 2–6 months this supports durable cash generation and reinvestment flexibility if ad monetization holds.
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
$33.68B
Dividend YieldN/A
Average Volume (3M)5.08M
Price to Earnings (P/E)47.3
Beta (1Y)2.24
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. Volume4,445,646
30 Day Avg. Volume5,083,637
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 Cap0.91
Enterprise Value/Revenue12.37
Enterprise Value/Gross Profit13.54
Enterprise Value/Ebitda42.39
Forecast
1Y Price Target
$218.62Price Target Upside33.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
EPS Forecast (FY)4.93
Revenue Forecast (FY)$3.22B
Reddit Inc Class A Business Overview & Revenue Model
Company Description
Reddit, Inc. oversees an internet-based service dedicated to fostering diverse online communities. This platform categorizes groups by shared passions, enabling its users to participate in dialogues through recounting experiences, sharing external...
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 | 721.97M | 544.64M | -469.56M | -73.32M | -149.93M | -124.74M |
| 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 | 2.01B | 125.28M | 77.63M |
| Stockholders Equity | 3.18B | 2.93B | 2.13B | -412.92M | 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
161.26
Positive
153.50
Positive
187.74
Negative
Market Momentum
4.18
Positive
54.11
Neutral
50.94
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 163.8 is below the 20-day moving average (MA) of 168.15, above the 50-day MA of 161.26, and below the 200-day MA of 187.74, indicating a neutral trend. The MACD of 4.18 indicates Positive momentum. The RSI at 54.11 is Neutral, neither overbought nor oversold. The STOCH value of 50.94 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 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $33.68B | 47.30 | 25.48% | ― | 70.64% | 477.34% | |
75 Outperform | $1.26B | 9.69 | 19.70% | ― | 2.09% | 4.03% | |
67 Neutral | $11.35B | 38.63 | 7.76% | ― | 16.30% | -82.47% | |
64 Neutral | $839.05M | ― | -10.32% | ― | 6.78% | 52.54% | |
63 Neutral | $8.27B | 12.98 | -286.13% | 2.32% | 2.00% | 30.81% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
52 Neutral | $7.72B | -19.15 | -18.93% | ― | 10.26% | 23.77% |
* Communication Services Sector Average
RDDT
Reddit Inc Class A
174.96
40.82
30.43%
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Reddit Inc Class A Corporate Events
Executive/Board ChangesShareholder Meetings
Reddit Shareholders Back Board, Auditor and Executive Pay
Positive
Jun 10, 2026
On June 8, 2026, Reddit, Inc. held its 2026 annual meeting of stockholders, where investors voted on director elections, auditor ratification, and executive compensation. Stockholders elected all eight director nominees, including CEO Steven Huffm...
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.