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Key Stats for Reddit Stock
- 1-Day Price Change for Reddit stock: 17.5%
- Current Share Price: $189
- 52-Week High: $230
- RDDT Stock Price Target: $187
What Happened?
Reddit (RDDT) stock exploded over 17% higher on Friday, August 1st, after the social media platform delivered a blockbuster second-quarter earnings report that crushed Wall Street expectations across virtually every metric.
Reddit posted revenue of $500 million versus analyst estimates of $426 million, representing a massive 78% year-over-year growth rate and marking the biggest revenue beat in Reddit’s short history as a public company.
The stellar results were driven by explosive growth in Reddit’s advertising business, which surged 84% year-over-year to $465 million.
Daily active users grew 21% to 110.4 million, exceeding expectations, while average revenue per user jumped 47% to $4.53.
The company achieved GAAP net income of $89 million compared to a loss of $10 million in the prior year period.
Reddit also issued stronger-than-expected guidance for the third quarter, projecting revenue between $535-545 million versus Wall Street estimates of $473 million, while adjusted EBITDA is expected to reach $185-195 million, well ahead of the $160 million analyst consensus.
See analysts’ growth forecasts and price targets for Reddit (It’s free!) >>>
What the Market Is Telling Us About RDDT Stock
The explosive RDDT stock reaction signals that investors are increasingly confident in Reddit’s ability to monetize its unique platform and massive user base.
Reddit’s transition to profitability, combined with accelerating user growth both domestically and internationally, validates the long-term investment thesis that many had questioned since the IPO.
CEO Steve Huffman emphasized Reddit’s strategic positioning in the AI era, noting that Reddit is the “#1 most cited domain for AI across all models” and highlighting how the platform’s authentic human conversations are becoming increasingly valuable as training data.
This positioning, combined with Reddit’s data licensing business growing 24% year-over-year to $35 million, suggests multiple revenue streams beyond traditional advertising.
The market is also responding positively to Reddit’s focused product strategy. Management announced they are “deprioritizing a few initiatives, including work on the user economy,” to concentrate resources on core product improvements, search functionality, and international expansion.
This strategic clarity, combined with strong execution metrics like Reddit Answers growing from one million to six million weekly users in just one quarter, demonstrates an ability to execute on its vision.
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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!
