Key Stats for Reddit Stock
- Current Price: $159.36
- Target Price (Mid): ~$326
- Street Target: ~$214
- Potential Total Return: ~104%
- Annualized IRR: ~19% / year
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What Happened?
Reddit (RDDT) closed at $159.36 on October 15, up 7.24%, in a session that also lifted Pinterest (PINS) 4.37%. No single catalyst has been confirmed. Reddit’s one announcement that day, setting its third-quarter report for October 29, came after the close.
Shares remain 30.67% below their 2025 close. Yet Reddit’s investor relations materials show 2025 free cash flow of $684 million, and consensus sees around $1.3 billion in 2026.
Huffman’s “1 of 1” Claim Holds Up Against Bigger Peers
At the Goldman Sachs Communacopia + Technology Conference on September 8, CEO Steve Huffman said, “So like Reddit as a business is 1 of 1 in our ability to generate cash, especially at our scale.”
Reported free cash flow over the four quarters through June 30 summed to about $1.02 billion. For 2026, consensus sees a free cash flow margin near 39% on capital spending of only about $7 million.
On TIKR’s Competitors page, Alphabet (GOOGL) and Meta Platforms (META) both show negative NTM market cap to free cash flow ratios. That means consensus expects negative free cash flow from each over the next 12 months. TIKR’s Meta coverage puts Street estimates for its 2027 capital spending at about $193 billion.
Investors pay far less for Reddit’s cash than they did a year ago. Its NTM market cap to free cash flow multiple fell from around 57x on September 30, 2025, to around 21x on October 15, 2026, a yield near 5%.
That multiple still sits about double Pinterest’s ~10x and above Snap’s (SNAP) ~12x. The premium is tied to growth: Reddit’s second-quarter revenue rose 61.10%, against 18% at Pinterest.
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Buybacks Rank Third, Behind Feeds and Acquisitions
Huffman ranked three uses for the cash:
- Investing in the business, “people and compute”
- Acquisitions, where “it’s team and technology first”
- Repurchases
Reddit bought back $239.6 million of stock in the first half of 2026, $234.6 million of it in the second quarter. Those purchases run under a $1 billion program with no expiration date. Net cash stands at $2.77 billion, about 9% of market value.
The first priority carries the upside. Huffman put Reddit “probably a year behind the state-of-the-art” on feeds, by as much as 18 months. He also argued its interest graph is “even more valuable” to advertisers than a social graph, because users reveal what they plan to buy. With capital spending this small, that catch-up should run through operating costs rather than the balance sheet.
The open risk is AI data licensing. Huffman said on September 8 that Reddit was negotiating with Google, and no outcome has been announced since. Separately, Huffman exercised options on and sold 17,308 shares on October 13 under a Rule 10b5-1 trading plan adopted May 20, 2026, according to his Form 4.
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TIKR Advanced Model Analysis
- Current Price: $159.36
- Target Price (Mid): ~$326
- Potential Total Return: ~104%
- Annualized IRR: ~19% / year
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TIKR’s mid case, the middle of its three scenarios, values Reddit at around $326 by December 31, 2030, from $159.36. Consensus offers a cross-check on the drivers. Seven analysts see revenue rising from $2.20 billion in 2025 to around $7.7 billion in 2030, and international revenue already grew faster than U.S. revenue in 2025 (76% versus 68%).
The margin driver is cash conversion, with consensus free cash flow margin rising from 31.1% in 2025 to around 41% by 2030. The primary risk is a weaker licensing renewal alongside soft U.S. traffic.
Upside: consensus 2026 revenue has risen about 14% since December 31, 2025. Downside, as an illustration: at Snap’s ~12x NTM free cash flow, Reddit’s expected cash would price the stock around $96 a share.
Conclusion
October 29 tests the cash engine directly. Reddit guided third-quarter adjusted EBITDA to $385 million to $395 million, and consensus already sits around $397 million, above the top of that range.
A print above consensus, with repurchases near the second quarter’s pace, would support the 21x multiple. EBITDA inside the guided range would suggest the Street ran ahead of the business.
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So what is Reddit stock actually worth?
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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!
