Upside case
Bull case
$288+67.6%
RDDT would need investors to value it at roughly 70x earnings — about 28x more generous than today's 42x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Reddit, Inc. (RDDT) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
26
analysts
16 bullish · 0 bearish · 26 covering RDDT
Strong Buy
1
Buy
15
Hold
10
Sell
0
Strong Sell
0
Consensus Target
$228
+32.9% vs today
Scenario Range
— – $288
Model bear to bull value window
Coverage
26
Published analyst ratings
Valuation Context
41.9x
Forward P/E · Market cap $32.9B
RDDT price targets
Three scenarios for where RDDT stock could go
Current
~$172
Confidence
55 / 100
Updated
May 1, 2026
Where we are now
Current · $172
Base
$355
Bull
$288
Market caseClosest to today
Base case
$355+106.7%
At 87x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Reddit, Inc.
RDDT · NYSECommunication ServicesInternet Content & InformationDecember year-end
Reddit operates a social media platform organized into thousands of topic-based communities called subreddits where users share content and discuss interests. It generates revenue primarily through advertising — accounting for over 90% of sales — with additional income from data licensing and premium subscriptions. Its key advantage is its massive, highly engaged user base that creates authentic, niche-specific content across virtually every imaginable topic.
Market Cap
$32.9B
Revenue TTM
$2.5B
Net Income TTM
$708M
Net Margin
28.6%
RDDT Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
89%Exceptional
12 quarters tracked
Revenue Beat Rate
89%Exceptional
vs consensus estimates
Avg EPS Surprise
+157.0%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$0.45/$0.19
Revenue
$500M/$426M
Q4 2025
EPS
$0.80/$1.04
Revenue
$585M/$547M
Q1 2026
EPS
$1.24/$0.94
Revenue
$726M/$666M
Q2 2026
EPS
$1.01/$0.62
Revenue
$663M/$608M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.45/$0.19 | +136.6% | $500M/$426M | +17.4% |
| Q4 2025 | $0.80/$1.04 | -23.1% | $585M/$547M | +7.0% |
| Q1 2026 | $1.24/$0.94 | +32.3% | $726M/$666M | +9.0% |
| Q2 2026 | $1.01/$0.62 | +62.9% | $663M/$608M | +9.1% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$3.2B
+30.7% YoY
FY2
$4.3B
+33.9% YoY
EPS Outlook
FY1
$4.22
+20.9% YoY
FY2
$5.41
+28.2% YoY
Trailing FCF (TTM)$869M
FCF Margin: 35.1%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
RDDT beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
RDDT Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $2.2B
Product Mix
Latest annual revenue by segment or product family
Advertising
93.6%
+74.0% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
81.1%
+67.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Advertising is the largest disclosed segment at 93.6% of FY 2025 revenue, up 74.0% YoY.
UNITED STATES is the largest reported region at 81.1%, up 67.9% YoY.
RDDT Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Overvalued
Fair value est. $62 — implies -62.9% from today's price.
Premium to Fair Value
62.9%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
RDDT
65.5x
vs
S&P 500
25.1x
+161% premium
vs Communication Services Trailing P/E
RDDT
65.5x
vs
Communication Services
15.0x
+338% premium
vs RDDT 5Y Avg P/E
Today
65.5x
vs
5Y Average
87.7x
25% discount
Forward PE
41.9x
S&P 500
19.1x
+120%
Communication Services
13.0x
+222%
5Y Avg
—
—
Trailing PE
65.5x
S&P 500
25.1x
+161%
Communication Services
15.0x
+338%
5Y Avg
87.7x
-25%
PEG Ratio
—
S&P 500
1.72x
—
Communication Services
0.74x
—
5Y Avg
—
—
EV/EBITDA
69.8x
S&P 500
15.2x
+358%
Communication Services
8.4x
+730%
5Y Avg
99.4x
-30%
Price/FCF
48.1x
S&P 500
21.1x
+128%
Communication Services
11.8x
+309%
5Y Avg
102.2x
-53%
Price/Sales
14.9x
S&P 500
3.1x
+378%
Communication Services
1.0x
+1428%
5Y Avg
21.9x
-32%
Dividend Yield
—
S&P 500
1.87%
—
Communication Services
3.45%
—
5Y Avg
—
—
| Metric | RDDT | S&P 500 | Communication Services | 5Y Avg RDDT |
|---|---|---|---|---|
| Forward PE | 41.9x | 19.1x+120% | 13.0x+222% | — |
| Trailing PE | 65.5x | 25.1x+161% | 15.0x+338% | 87.7x-25% |
| PEG Ratio | — | 1.72x | 0.74x | — |
| EV/EBITDA | 69.8x | 15.2x+358% | 8.4x+730% | 99.4x-30% |
| Price/FCF | 48.1x | 21.1x+128% | 11.8x+309% | 102.2x-53% |
| Price/Sales | 14.9x | 3.1x+378% | 1.0x+1428% | 21.9x-32% |
| Dividend Yield | — | 1.87% | 3.45% | — |
RDDT trades above S&P 500 benchmarks on 5 of 5 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolRDDT Financial Health
Verdict
Exceptional
RDDT generates $869M in free cash flow at a 35.1% margin — 18.4% ROIC signals a durable competitive advantage.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$2.5B
Revenue Growth
TTM vs prior year
+70.6%
Gross Margin
Gross profit as a share of revenue
91.4%
Operating Margin
Operating income divided by revenue
25.1%
Net Margin
Net income divided by revenue
28.6%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$3.49
Free Cash Flow (TTM)
Cash generation after capex
$869M
FCF Margin
FCF as share of revenue — the primary cash quality signal
35.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
18.4%
ROA
Return on assets, trailing twelve months
23.1%
Cash & Equivalents
Liquid assets on the balance sheet
$954M
Net Cash
Cash exceeds total debt — no net leverage
$930M
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE
Return on equity, trailing twelve months
25.5%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
192M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageRDDT Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
High Valuation Multiples
Reddit’s current valuation is markedly above industry peers, with a Price-to-Sales ratio of 12.4 and a Price-to-Earnings ratio of 51.6. Such high multiples suggest the market may be pricing in aggressive growth expectations that could be difficult to sustain, potentially leading to a valuation correction.
High Risk
Decelerating Revenue Growth
Revenue growth is projected to slow from over 69% in 2025 to 42.7% in 2026 and 30.2% in 2027. This deceleration could erode investor confidence and reduce the company’s ability to justify its current valuation multiples.
High Risk
Advertising Market Sensitivity
Approximately 95% of Reddit’s revenue derives from advertising. A downturn in the digital advertising market or tighter ad budgets could sharply reduce top‑line income, directly impacting profitability.
High Risk
Insider Selling
Insiders have offloaded more than $65 million in shares in recent months. Significant insider selling may signal management’s lack of confidence and could pressure the stock price.
High Risk
High Beta
Reddit’s beta ranges from 2.07 to 2.4, indicating it is more volatile than the broader market. In risk‑off environments, the stock could experience pronounced price swings, increasing downside risk.
High Risk
Content Moderation & Legal Risks
Recent rulings allow social media platforms to be liable for design features that foster user addiction. Reddit’s reliance on high user engagement could expose it to new regulatory liabilities and potential litigation costs.
Medium
Competition for Ad Budgets
Reddit faces growing competition from other social media platforms for advertising dollars and user attention. Increased competition could compress margins and limit future revenue growth.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why RDDT Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Advertising Monetization & ARPU Growth
Reddit’s global Average Revenue Per User (ARPU) has shown strong year‑over‑year growth, and the company has a substantial runway to lift ARPU in international markets that currently trail U.S. levels. By improving advertiser tools and expanding its global reach, analysts project continued revenue growth, albeit at a decelerating pace, with significant increases expected in the coming years.
International Expansion & Language Coverage
Machine translation now supports numerous languages, and international Daily Active Users (DAU) are growing steadily. This creates a multi‑year opportunity for Reddit to close the ARPU gap with its U.S. market and capture higher monetization rates abroad.
AI & Data Licensing Partnerships
Reddit is a key data source for AI training, evidenced by licensing deals with Google and OpenAI. Products such as Reddit Max, an AI‑powered automated ad‑campaign tool, and Reddit Answers, an AI search product, are positioned as new revenue drivers.
Strong Financials & Free Cash Flow
The company has demonstrated robust revenue growth, higher engagement, and improving profitability, generating significant free cash flow. Its balance sheet is described as robust, with substantial cash reserves and low debt, supporting future expansion.
Product Innovation & AI Tools
Reddit’s AI‑driven offerings—Reddit Max for automated ad campaigns and Reddit Answers for AI search—are seen as key growth catalysts. These products leverage the platform’s unique data set to create new monetization avenues.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
RDDT Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$171.70
52W Range Position
41%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$94.89
+80.9% from the low
52-Week High
$282.95
-39.3% from the high
1 Month
+23.99%
3 Month
+13.67%
YTD
-29.0%
1 Year
+47.6%
3Y CAGR
+50.4%
5Y CAGR
+27.8%
10Y CAGR
+13.0%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
RDDT vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
41.9x
vs 13.2x median
+218% above peer median
Revenue Growth
+30.7%
vs +1.8% median
+1612% above peer median
Net Margin
28.6%
vs 1.8% median
+1471% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
RDD RDDT Reddit, Inc. | $32.9B | 41.9x | +30.7% | 28.6% | Buy | +32.9% |
PIN PINS Pinterest, Inc. | $15.0B | 12.2x | +13.2% | 7.6% | Buy | +13.8% |
SNA SNAP Snap Inc. | $10.5B | — | +12.5% | -7.8% | Hold | +29.5% |
BMB BMBL Bumble Inc. | $472M | 4.4x | -3.9% | -72.0% | Hold | -0.9% |
MTC MTCH Match Group, Inc. | $8.8B | 14.2x | +1.8% | 18.8% | Buy | -4.4% |
IAC IAC IAC InterActive Corp. | $3.1B | 105.2x | -21.9% | 1.8% | Buy | +18.9% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsRDDT Investor Questions
Common questions answered from live analyst data and company financials.
01Is Reddit, Inc. (RDDT) stock a buy or sell in 2026?
Reddit, Inc. (RDDT) is rated Buy by Wall Street analysts as of 2026. Of 26 analysts covering the stock, 16 rate it Buy or Strong Buy, 10 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $228, implying +32.9% from the current price of $172.
02What is the RDDT stock price target for 2026?
The Wall Street consensus price target for RDDT is $228 based on 26 analyst estimates. The high-end target is $325 (+89.3% from today), and the low-end target is $110 (-35.9%). The base case model target is $355.
03Is Reddit, Inc. (RDDT) stock overvalued in 2026?
RDDT trades at 41.9x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals significantly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Reddit, Inc. (RDDT) stock in 2026?
The primary risks for RDDT in 2026 are: (1) High Valuation Multiples — Reddit’s current valuation is markedly above industry peers, with a Price-to-Sales ratio of 12. (2) Decelerating Revenue Growth — Revenue growth is projected to slow from over 69% in 2025 to 42. (3) Advertising Market Sensitivity — Approximately 95% of Reddit’s revenue derives from advertising. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Reddit, Inc.'s revenue and earnings forecast?
Analyst consensus estimates RDDT will report consensus revenue of $3.2B (+30.7% year-over-year) and EPS of $4.22 (+20.9% year-over-year) for the upcoming fiscal year. The following year, analysts project $4.3B in revenue.
06When does Reddit, Inc. (RDDT) report its next earnings?
A confirmed upcoming earnings date for RDDT is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Reddit, Inc. generate?
Reddit, Inc. (RDDT) generated $869M in free cash flow over the trailing twelve months — a free cash flow margin of 35.1%. RDDT returns capital to shareholders through and share repurchases ($0 TTM).