Key Stats for Reddit Stock
- Current Price: $166.48
- Street Target (Mean): ~$223
- Potential Upside to Street Target: ~34%
- Earnings Reaction: +13.07% (April 30, 2026)
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What Happened?
Reddit (RDDT) was one of the most searched stocks in the market this week. Shares jumped 13.07% on May 1, 2026, the session after the company delivered Q1 2026 results that left the bear case looking badly outflanked. Bears had pointed to slowing U.S. daily user growth and a stock still 41% below its 52-week high of $282.95 as evidence that the growth story was losing steam. The Q1 print pushed back hard.
Revenue grew 69% year-over-year to $663 million, beating the $612.67 million analyst consensus by more than 8%. GAAP EPS came in at $1.01, roughly 80% above the $0.56 average estimate. That marked Reddit’s seventh consecutive quarter of revenue growth above 60%. Net income soared to $204 million from $26 million a year ago, and the adjusted EBITDA margin expanded nearly 1,100 basis points year-over-year to 40%.
Co-Founder and CEO Steve Huffman framed the result around what Reddit calls its “raw materials.” “Scarce assets tend to become more valuable over time,” Huffman said on the call, “and authentic human conversation at scale is becoming increasingly rare.”
He pointed to Reddit’s library of over 25 billion posts and comments as foundational input for AI models, a positioning that underpins both the data licensing business and the ad platform’s targeting advantage. COO Jen Wong noted that conversion-driven lower-funnel revenue grew triple digits year-over-year, with advertising revenue reaching $625 million, up 74%.
Management guided Q2 2026 revenue to $715–$725 million, with an adjusted EBITDA margin of around 40% at the midpoint.
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Is Reddit Undervalued Today?
Reddit’s valuation multiples have compressed sharply since 2025, and that is where the current opportunity lives. At 19.41x NTM EV/EBITDA and 23.21x NTM P/E, Reddit trades well below the 46x to 50x ranges it carried a year ago. Meanwhile, LTM free cash flow reached $581 million, and gross margins held above 91%. For a platform still in the early stages of advertiser penetration, the setup is notably different from a year ago.
On TIKR’s Competitors page, Reddit’s 8.51x NTM EV/Revenue sits just below Alphabet at 9.18x, above Meta at 5.89x, and well ahead of Pinterest at 1.97x. The premium over Pinterest reflects Reddit’s stronger growth trajectory. The gap to Meta reflects how much advertiser adoption Reddit still has ahead of it, which is also where most of the upside lives.
The operational data supports that upside. Active advertisers grew more than 75% year-over-year. Operating expenses dropped from 61% to 51% of revenue year-over-year, per CFO Andrew Vollero on the call. Reddit Max, the company’s automated ad platform (which uses AI to optimize bids, targeting, and creative automatically), is delivering a 17% average reduction in advertiser cost per action and 25% more conversions. The Shopify integration announced in March opens the platform to mid-market and small-business advertisers not yet advertising on Reddit at scale.
The bear case is narrower now, but still real. According to Reddit’s Q1 2026 earnings release, U.S. DAUq (daily active unique users) came in at 53.5 million, up just 7% year-over-year, against 200 million U.S. weekly users. Huffman named closing that gap, toward a target of 100 million U.S. daily users, as the company’s top internal priority.
Until frequency improves, advertising impression growth is capped. International ARPU of $2.02 versus U.S. ARPU of $9.63 signals that the international monetization gap remains wide, both a long-term opportunity and a near-term drag.
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TIKR Advanced Model Analysis
- Current Price: $166.48
- Target Price (Mid): ~$494
- Potential Total Return: ~197%
- Annualized IRR: ~26% / year
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The mid-case scenario assumes a revenue CAGR of around 25% through 12/31/30. Two drivers underpin that: continued lower-funnel advertiser adoption through Reddit Max and dynamic product ads, and ARPU expansion internationally as Reddit’s direct sales footprint grows. The margin driver is operating leverage already visible in the numbers: costs growing at roughly half the rate of revenue. The mid-case net income margin of around 47% by 2030 assumes that trend holds.
The upside: if Reddit moves U.S. daily users meaningfully above 53.5 million, ad impressions and ARPU scale well above current estimates. The downside: a stall in U.S. DAU growth combined with any softening in digital ad spending could push the stock back toward the 52-week low of $94.89.
Conclusion
The metric to watch at Reddit’s Q2 2026 earnings on July 30, 2026, is U.S. DAUq. Any sequential acceleration from Q1’s 53.5 million would materially strengthen the bull case. Flat or declining numbers would reignite the engagement debate regardless of advertising results.
Reddit posted a rare Q1 trifecta: hypergrowth, expanding profitability, and record cash generation with $1 million in CapEx. The Street’s ~$223 mean target implies around 34% upside from here. The bigger return, if the TIKR model is right, depends on whether 200 million weekly U.S. visitors can be converted into a daily habit.
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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.
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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!
