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Reddit Inc Class A
(NYSE:RDDT)
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Rating:76Outperform
Price Target:
$146.00
▼(-4.39% Downside)
Action:Reiterated
Date:10/30/26
RDDT scores well primarily on financial performance, driven by the sharp shift to strong profitability and substantial free cash flow alongside a low-debt balance sheet. The earnings call adds support via upbeat guidance and strong ad momentum, but the overall score is held back by weak technicals (below key moving averages with negative MACD) and meaningful user/traffic risks tied to declining search referrals.
Positive Factors
Rapid profitable growth
Reddit has converted rapid revenue expansion into substantial profitability, showing that its platform can scale more efficiently as audience monetization improves. Sustaining this combination of growth and margins would strengthen reinvestment capacity and support durable earnings power.
Negative Factors
Search referral exposure
Reddit remains exposed to changes in search discovery, particularly as Google AI features reduce referral traffic. Persistent declines could shrink total sessions and user acquisition, weakening engagement opportunities and creating a lasting headwind for advertising scale.
Read all positive and negative factors
Positive Factors
Negative Factors
Rapid profitable growth
Reddit has converted rapid revenue expansion into substantial profitability, showing that its platform can scale more efficiently as audience monetization improves. Sustaining this combination of growth and margins would strengthen reinvestment capacity and support durable earnings power.
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
$24.93B
Dividend YieldN/A
Average Volume (3M)4.64M
Price to Earnings (P/E)25.1
Beta (1Y)2.38
Revenue Growth66.59%
EPS Growth285.68%
CountryUS
Employees2,555
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)5.17
Shares Outstanding146,103,200
10 Day Avg. Volume4,265,725
30 Day Avg. Volume4,638,756
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/Revenue8.34
Enterprise Value/Gross Profit9.11
Enterprise Value/Ebitda25.97
Forecast
1Y Price Target
$166.24Price Target Upside8.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering24
EPS Forecast (FY)5.4
Revenue Forecast (FY)$3.39B
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’s revenue model is primarily driven by advertising, supplemented by user subscriptions and other platform-related revenue. Advertising is generated by selling marketing placements on Reddit to brands and advertisers, including various ad fo...
Reddit Inc Class A Earnings Call Summary
Earnings Call Date:Oct 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 17, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. Reddit reported 53% revenue growth, expanding margins, near-doubling year-to-date adjusted EBITDA, significant free cash flow generation, strong advertiser demand, and improving product and new-user retention. The principal challenges were the accelerating decline in search referral traffic, potential low-double-digit Q4 DAUq pressure, lower total sessions, and uncertainty around the logged-in-only transition. Management emphasized that logged-in and app users, which generate over 80% of monetization, continued to grow or remain strong.Positive Updates
Strong Revenue Growth and $3 Billion Milestone
Q3 revenue grew 53% year-over-year, on top of nearly 70% revenue growth last year, and trailing 12-month revenue crossed $3 billion.
Negative Updates
Meaningful Decline in Search Referral Traffic
Search referral traffic was down meaningfully in Q3, with the decline accelerating later in the quarter. The largest impact was on logged-out and web traffic, with some effect flowing through to logged-in and app traffic because search referral is a common source of user reengagement.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth and $3 Billion Milestone
Q3 revenue grew 53% year-over-year, on top of nearly 70% revenue growth last year, and trailing 12-month revenue crossed $3 billion.
Read all positive updates
Company Guidance
For the fourth quarter of 2026, Reddit estimates revenue in the range of $1 billion to $1.03 billion, representing 38% to 42% year-over-year growth with a midpoint of approximately 40%, and adjusted EBITDA in the range of $480 million to $510 million, representing 47% to 56% year-over-year growth and an adjusted EBITDA margin of approximately 49% at the midpoint; if the search-referral decline continues, current trends would suggest that total DAUqs could fall in Q4 by a low double-digit percentage from the current base of 130 million DAUqs, while Reddit plans to begin fully testing logged-in only in select markets outside the U.S. in Q4, and continues to track against its long-term guide of 1% to 3% annual dilution.Reddit Inc Class A Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
91
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.09B | 2.20B | 1.30B | 804.03M | 666.70M | 484.92M |
| Gross Profit | 2.83B | 2.01B | 1.18B | 693.02M | 561.90M | 412.35M |
| EBITDA | 991.59M | 544.64M | -469.56M | -73.32M | -149.93M | -124.74M |
| Net Income | 991.70M | 529.72M | -484.28M | -90.82M | -158.55M | -127.90M |
Balance Sheet | ||||||
| Total Assets | 3.96B | 3.24B | 2.34B | 1.60B | 1.60B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 3.03B | 2.48B | 1.84B | 1.21B | 1.27B | 1.41B |
| Total Debt | 31.41M | 23.21M | 26.70M | 25.75M | 19.49M | 13.46M |
| Total Liabilities | 380.32M | 310.13M | 205.85M | 2.01B | 125.28M | 77.63M |
| Stockholders Equity | 3.58B | 2.93B | 2.13B | -412.92M | 1.47B | 1.57B |
Cash Flow | ||||||
| Free Cash Flow | 1.20B | 684.17M | 215.82M | -84.84M | -100.25M | -132.49M |
| Operating Cash Flow | 1.20B | 690.88M | 222.07M | -75.11M | -94.02M | -130.19M |
| Investing Cash Flow | -370.12M | -218.89M | -440.69M | 41.29M | -804.18M | 170.68M |
| Financing Cash Flow | -388.69M | -80.56M | 379.54M | -811.00K | -3.78M | 1.18B |
Reddit Inc Class A Technical Analysis
Negative
152.70
Price Trends
151.54
Negative
162.74
Negative
160.17
Negative
Market Momentum
-4.67
Positive
30.90
Neutral
7.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDDT, the sentiment is Negative. The current price of 152.7 is above the 20-day moving average (MA) of 149.67, above the 50-day MA of 151.54, and below the 200-day MA of 160.17, indicating a bearish trend. The MACD of -4.67 indicates Positive momentum. The RSI at 30.90 is Neutral, neither overbought nor oversold. The STOCH value of 7.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $24.93B | 25.09 | 30.57% | ― | 66.59% | 285.68% | |
73 Outperform | $3.46T | 14.56 | 42.62% | 0.30% | 22.21% | 89.60% | |
71 Outperform | $1.60T | 21.03 | 30.27% | 0.34% | 27.53% | 28.01% | |
67 Neutral | $5.31B | 23.14 | 9.84% | ― | 10.34% | 620.66% | |
64 Neutral | $11.28B | 79.64 | 5.25% | ― | 16.64% | -87.65% | |
61 Neutral | $9.61B | -30.77 | -14.61% | ― | 12.65% | 42.94% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
RDDT
Reddit Inc Class A
129.60
-79.35
-37.98%
META
Meta Platforms
624.52
-21.64
-3.35%
GOOGL
Alphabet Class A
283.82
3.36
1.20%
SNAP
Snap
5.68
-2.12
-27.18%
BILI
Bilibili
12.87
-17.38
-57.45%
PINS
Pinterest
19.92
-13.18
-39.82%
Reddit Inc Class A Corporate Events
Business Operations and StrategyExecutive/Board Changes
Reddit Announces Chief Legal Officer Leadership Transition
Neutral
Aug 12, 2026
On August 12, 2026, Reddit, Inc. announced that Benjamin Lee had notified the company of his intention to step down as Chief Legal Officer and Corporate Secretary, effective September 14, 2026, and that he would remain employed through September 2...
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.