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Reddit Inc Class A
(NYSE:RDDT)
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Rating:76Outperform
Price Target:
$186.00
▲(21.81% Upside)
Action:Reiterated
Date:08/18/26
RDDT scores well on fundamentals, led by strong profitability, minimal leverage, and exceptional free cash flow, reinforced by upbeat guidance and cash/buyback strength from the latest earnings call. The overall score is held back by a mixed technical picture (negative MACD and trading below longer-term moving averages) and a growth-priced valuation (P/E ~36) without a dividend yield.
Positive Factors
Advertising Growth and Monetization
Strong advertising growth, expanding advertiser adoption, and higher ARPU indicate improving monetization of Reddit’s community network. Gains across conversion volume, dynamic ads, app installs, and international markets could support durable revenue expansion.
Negative Factors
Traffic Referral and User Acquisition Risk
Reliance on search, referrals, and paid acquisition creates a structural risk to user growth and engagement. Weaker traffic sources could limit inventory expansion and reduce the operating leverage expected from Reddit’s advertising model.
Read all positive and negative factors
Positive Factors
Negative Factors
Advertising Growth and Monetization
Strong advertising growth, expanding advertiser adoption, and higher ARPU indicate improving monetization of Reddit’s community network. Gains across conversion volume, dynamic ads, app installs, and international markets could support durable revenue expansion.
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
$30.42B
Dividend YieldN/A
Average Volume (3M)7.43M
Price to Earnings (P/E)34.1
Beta (1Y)2.30
Revenue Growth66.59%
EPS Growth285.68%
CountryUS
Employees2,555
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)4.57
Shares Outstanding146,103,200
10 Day Avg. Volume4,507,377
30 Day Avg. Volume7,430,223
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$216.00Price Target Upside41.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering24
EPS Forecast (FY)5.37
Revenue Forecast (FY)$3.38B
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 generates revenue primarily through advertising and, to a lesser extent, user subscriptions and other services.
1) Advertising (primary revenue stream)
- Promoted placements: Reddit sells ad inventory that appears in user feeds and within/...
Reddit Inc Class A Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based commercial momentum with high revenue growth (61% YoY), robust monetization gains, improved profitability and record cash flow milestones. Product improvements showed early traction (notably in app retention, feed work, Reddit Max adoption, and video formats) supporting the monetization trajectory. Key challenges center on volatile search/referral traffic and the need to further improve user acquisition returns and retention from a relatively small app retention base; management positioned these as controllable via product work while also reducing some user-metric disclosures. On balance, the positive financial and product signals substantially outweigh the risks discussed.Positive Updates
Strong Revenue Growth
Total revenue grew 61% year-over-year to $805 million in Q2 2026, driven by advertising revenue of $762 million (up 64% YoY) and other revenue of $43 million (up 24% YoY).
Negative Updates
Search Referral Volatility and DAU Headwinds
Search referrals were "choppy" and traffic became more volatile late in the quarter, contributing to an offset in DAU growth despite product-driven gains; visibility into referral traffic remains low.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Total revenue grew 61% year-over-year to $805 million in Q2 2026, driven by advertising revenue of $762 million (up 64% YoY) and other revenue of $43 million (up 24% YoY).
Read all positive updates
Company Guidance
Reddit guided Q3 revenue of $860M–$870M (up 47%–49% YoY, ~48% midpoint) and adjusted EBITDA of $385M–$395M (up 63%–67% YoY) implying ~45% adjusted EBITDA margin at the midpoint; they expect Q3 stock‑based compensation and related taxes of $140M–$155M and lowered full‑year SBC guidance from the high‑teens % of revenue to the low‑to‑mid‑teens (SBC YTD <13% of revenue, >1,000 bps lower vs H1 last year); full‑year dilution is expected at the low end of the 1%–3% target range (before buybacks), Q2 repurchases were ~$235M (~1.5M shares at ~$157) with ~$760M remaining authorization, and the company noted strong cash metrics (LTM operating cash flow crossed $1B; cash, cash equivalents & marketable securities $2.8B, up >$700M YoY) while continuing to report total US and international DAUs/WAUs (but ending logged‑in/logged‑out disclosures after Q2).Reddit Inc Class A Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
92
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.78B | 2.20B | 1.30B | 804.03M | 666.70M | 484.92M |
| Gross Profit | 2.54B | 2.01B | 1.18B | 693.02M | 561.90M | 412.35M |
| EBITDA | 894.48M | 544.64M | -469.56M | -73.32M | -149.93M | -124.74M |
| Net Income | 871.10M | 529.72M | -484.28M | -90.82M | -158.55M | -127.90M |
Balance Sheet | ||||||
| Total Assets | 3.64B | 3.24B | 2.34B | 1.60B | 1.60B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 2.79B | 2.48B | 1.84B | 1.21B | 1.27B | 1.41B |
| Total Debt | 20.87M | 23.21M | 26.70M | 25.75M | 19.49M | 13.46M |
| Total Liabilities | 350.90M | 310.13M | 205.85M | 2.01B | 125.28M | 77.63M |
| Stockholders Equity | 3.29B | 2.93B | 2.13B | -412.92M | 1.47B | 1.57B |
Cash Flow | ||||||
| Free Cash Flow | 1.02B | 684.17M | 215.82M | -84.84M | -100.25M | -132.49M |
| Operating Cash Flow | 1.03B | 690.88M | 222.07M | -75.11M | -94.02M | -130.19M |
| Investing Cash Flow | 30.23M | -218.89M | -440.69M | 41.29M | -804.18M | 170.68M |
| Financing Cash Flow | -303.54M | -80.56M | 379.54M | -811.00K | -3.78M | 1.18B |
Reddit Inc Class A Technical Analysis
Negative
152.70
Price Trends
170.08
Negative
166.36
Negative
174.71
Negative
Market Momentum
-4.13
Negative
48.08
Neutral
41.60
Neutral
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 below the 20-day moving average (MA) of 156.42, below the 50-day MA of 170.08, and below the 200-day MA of 174.71, indicating a bearish trend. The MACD of -4.13 indicates Negative momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 41.60 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | $4.10T | 17.00 | 50.84% | 0.26% | 20.23% | 112.71% | |
76 Outperform | $30.42B | 34.14 | 29.02% | ― | 66.59% | 285.68% | |
73 Outperform | $1.51T | 22.69 | 29.73% | 0.35% | 27.65% | -5.02% | |
71 Outperform | $12.02B | 59.57 | 6.50% | ― | 16.64% | -87.65% | |
67 Neutral | $6.50B | 28.11 | 9.84% | ― | 10.34% | 620.66% | |
61 Neutral | $9.45B | -30.99 | -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
155.99
-76.12
-32.79%
META
Meta Platforms
610.68
-135.52
-18.16%
GOOGL
Alphabet Class A
342.48
110.84
47.85%
SNAP
Snap
5.70
-1.39
-19.61%
BILI
Bilibili
15.50
-7.00
-31.11%
PINS
Pinterest
20.85
-16.27
-43.83%
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...
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.