Key Stats for Reddit Stock
- Current Price: $162.10 (June 12, 2026 close)
- Target Price (Mid): ~$370
- Street Target: around $225
- Potential Total Return: around 129% (to 12/31/30)
- Annualized IRR: around 20% / year
- Max Drawdown: -54.99% (March 27, 2026)
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
Reddit, Inc. (RDDT) closed at $162.10 on June 12, down 6.44% on a day the S&P 500 rose. No fresh bad news was attached to the drop. A stock that swings 6% on a quiet day is one that the market cannot agree on, and the disagreement comes down to one thing: a set of AI data contracts coming up for renewal.
Reddit licenses its content to train artificial intelligence models. Those deals, signed in 2024 with Google parent Alphabet and ChatGPT maker OpenAI, are up for renewal this year. Bulls see a windfall. Bears see the very thing quietly slowing Reddit’s user growth. Both can be right, and that unresolved tension is the real story for anyone holding the stock into late 2026.
The setup was sharpened a week earlier. On June 5, Reddit was widely expected to join the S&P 500 but was passed over, with Marvell Technology and Flex added instead. Shares fell 6% that Friday and slid a further 3% after hours. An index snub is not a fundamental event, but it removed a forced-buying catalyst some investors had penciled in.
The $550 Million Question
On June 5, Wells Fargo turned more constructive on the renewals, forecasting that combined annual revenue from the two deals could surge to $550 million on renegotiation, more than quadrupling a current run rate of roughly $130 million. In 2025, the deals produced about $140 million against Reddit’s $2.2 billion in total revenue. The headline number is large relative to where licensing sits today.
There is a catch that the bull case tends to skip. Wells Fargo also flagged that the licensing pacts have become a headwind to user growth, because when an AI model answers a question using Reddit’s content, the user never visits Reddit. The bank pegged the drag at a roughly $16 billion overhang on Reddit’s enterprise value and kept an Equal Weight rating with a $176 price target. The same data that makes Reddit valuable to AI companies may be cannibalizing the traffic that makes it valuable to advertisers.
CEO and co-founder Steve Huffman pushed back at the Bank of America Global Technology Conference on June 3, arguing AI is an opportunity, not a threat. “There is no LLM on Earth that wasn’t significantly trained on Reddit’s data, including Google and OpenAI with whom we have big partnerships and including other folks with whom we have big lawsuits,” he said. If Huffman is right that this position is durable and underpriced, the renewals become a structural new revenue stream rather than a one-time bump.
A Business That Keeps Beating, a Stock That Keeps Falling
The operating results have been relentless. Reddit’s Q1 2026 print drove a 13.07% single-day jump the following session, and the company has beaten estimates every quarter, TIKR shows, most recently topping revenue consensus by 8.79% and adjusted EPS by 26.13%. Trailing twelve-month revenue sits at $2.47 billion on a 91.4% gross margin, higher than almost any company at this scale.
Yet the stock fell 54.99% from its March 27, 2026, high before recovering, and it remains far below its 52-week high of $282.95. The market is not punishing the numbers; it is repricing the multiple. NTM EV/Revenue has compressed to 8.23x from far higher levels last year, a valuation reset driven by AI-disruption fear rather than any miss.
That shows up against peers. TIKR’s Competitors data puts Reddit at 8.23x NTM EV/Revenue, roughly in line with Alphabet at 8.54x and above Meta Platforms at 5.47x. On EV/EBITDA, Reddit sits at 18.74x versus Alphabet’s 18.03x and Meta’s 9.54x. The premium to Meta holds up only if Reddit keeps growing in a different league, and it does: a forward two-year revenue CAGR of around 39% dwarfs the larger platforms. A premium for that growth is defensible. A premium that assumes the growth never slows is what the AI-overhang debate is testing.
Management is treating the weakness as a chance to buy. “When our stock, when we think it’s a good value, we’ll be a buyer as well. We’ve bought 1 million shares this quarter already,” Huffman said at the conference. A founder-led company buying its own stock during a drawdown signals where insiders think fair value sits.
See historical and forward estimates for Reddit stock (It’s free!) >>>
TIKR Advanced Model Analysis
- Current Price: $162.10
- Target Price (Mid): ~$370
- Potential Total Return: ~129%
- Annualized IRR: ~20% / year
See analysts’ growth forecasts and price targets for Reddit stock (It’s free!) >>>
This uses TIKR’s mid-case scenario, realized December 31, 2030, because it anchors to consensus rather than a bull or bear extreme. The model targets around $370, roughly 129% total return over about 4.5 years, or around 20% annualized.
Two revenue drivers carry the case: advertising scale and data licensing. Advertising growth runs through Reddit’s automated campaign tools and international expansion, while the licensing renewals add a higher-margin stream that barely existed two years ago. The margin driver is operating leverage, with net income margins expanding toward the low 30s as Reddit grows revenue faster than costs. The primary risk is the same licensing dynamic that powers the upside: AI answer engines draining the daily traffic the ad business depends on.
The upside: converting even part of Reddit’s 200 million U.S. weekly users into daily users while the renewals reprice higher keeps revenue compounding in the mid-20s for years. The downside: accelerating AI disruption stalls the ad engine, and a premium multiple on slowing growth unwinds further.
Conclusion
The catalyst to watch is the renewal itself. Reddit’s Google and OpenAI deals reprice this year, and the terms will reveal which narrative is winning. Good looks like licensing revenue stepping toward Wells Fargo’s $550 million range alongside stable or accelerating U.S. daily active users at Q2 2026 earnings. Bad looks like a modest licensing bump with another quarter of decelerating users. Watch the DAU line first; the renewal headlines will follow.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
Should You Invest in Reddit?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Reddit, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Reddit alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
