Reddit, Inc. (RDDT) AI Stock Analysis
RDDT AI stock analysis summary
AI ResearchReddit, Inc. (RDDT) operates a global digital platform organizing user-driven communities and discussions across diverse topics. In FY2025, the company grew revenue 69.4% to $2.20B and achieved profitability with net income of $529.7M. Over the trailing twelve months, revenue reached $2.78B with a profit margin of 31.4% and net cash of $2.77B as of June 30, 2026.
- Market cap
- $30.04B
- Revenue (TTM)
- $2.78B
- P/E
- 36.3x fwd 23.2x
- 1Y return
- -21.5% S&P 500 16.8%
- Avg. target
- $213.71 36.9% vs last close
Bull case
- Quarterly revenue grew 61.1% year-over-year in the quarter ended June 30, 2026, with quarterly earnings increasing 177.8%.
- Reddit generated $684.2M in free cash flow in FY2025 alongside a 91.2% gross margin and a 20.1% operating margin.
- The balance sheet carries $2.77B in net cash with total debt of only $20.9M as of June 30, 2026.
Bear case
- Reddit's price-to-sales ratio of 10.8x and trailing P/E of 36.3x sit well above the median of its S&P 500 Communication Services peers of 1.8x and 17.1x.
- Shares fell 32.1% year-to-date and 21.5% over the past year, while the S&P 500 gained 16.8%.
- Short interest represents 15.2% of float, reflecting substantial market skepticism.
What Reddit does
Reddit, Inc., headquartered in San Francisco, California, operates an influential website for organizing diverse digital communities. Founded in 2005, Reddit enables users worldwide to create forums tailored to specific interests, engage in conversations, share experiences, upload media including images and videos, and interact through comments and replies. The platform operates on a user-driven content curation model and acts as a subsidiary of Advance Publications, Inc. Reddit provides a dynamic online ecosystem where individuals and organizations connect, collaborate, and share information on topics spanning niche hobbies to global news and social issues.
Growth and profitability
Reddit expanded revenue from $484.9M in FY2021 to $2.20B in FY2025, producing a 5-year revenue CAGR of 57.3% from FY2020 to FY2025. Gross margin expanded from 85.0% in FY2021 to 91.2% in FY2025. After reporting net income of -$484.3M and an operating margin of -43.1% in FY2024, Reddit generated net income of $529.7M and an operating margin of 20.1% in FY2025. Free cash flow improved from -$84.8M in FY2023 to $215.8M in FY2024 and $684.2M in FY2025. For the latest quarter ended June 30, 2026, quarterly revenue growth reached 61.1% year-over-year, while quarterly earnings growth was 177.8%.
Balance sheet and cash flow
As of June 30, 2026, Reddit held $2.79B in cash and short-term investments against total debt of $20.9M, yielding net cash of $2.77B. Total assets stood at $3.64B and shareholders' equity was $3.29B, supporting a current ratio of 10.49 and a debt-to-equity ratio of 0.01. In FY2025, operating cash flow was $690.9M while capital expenditures were $6.7M. Reddit's share count increased 23.7% over 5 years.
Valuation and performance
At its last close of $156.14, Reddit has a market cap of $30.04B and trades at a trailing P/E of 36.3x and forward P/E of 23.2x, above the median of its S&P 500 Communication Services peers of 17.1x and 13.8x. Its price-to-sales of 10.8x and EV to EBITDA of 33.0x also compare to peer medians of 1.8x and 10.9x. The stock carries a PEG ratio of 0.76. Over the past year, RDDT delivered a return of -21.5%, while the S&P 500 (SPY) returned 16.8%.
What analysts expect
Wall Street analysts hold 16 Strong Buy, 6 Buy, 11 Hold, 0 Sell, and 1 Strong Sell ratings on Reddit. The mean price target of $213.71 represents a 36.9% premium to the last close of $156.14. For the current fiscal year ending December 31, 2026, consensus estimates project EPS of $5.39 on revenue of $3.39B. Reddit beat EPS estimates in each of the last 4 quarters, and its next earnings date is October 29, 2026.
Key risks and what to watch
- High volatility is indicated by a beta of 2.05 as the stock trades 5.3% below its 200-day average.
- Reddit's share count increased 23.7% over 5 years, presenting ongoing shareholder dilution.
- Research and development expense remains elevated, totaling $783.1M in FY2025 and $935.2M in FY2024.
- The stock has declined significantly from its 52-week high of $263.50 to $156.14.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this RDDT AI stock analysis
This page is an AI-written research summary of Reddit, Inc. (RDDT). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: RDDT income statement, RDDT balance sheet, RDDT key metrics, RDDT analyst forecast, RDDT chart. See the RDDT stock overview for the latest quote and news.
RDDT AI stock analysis FAQ
When is Reddit's next earnings date?
Reddit is scheduled to report its next earnings on October 29, 2026.
Does Reddit pay a dividend?
Reddit does not pay a dividend.
How much cash and debt does Reddit have?
As of June 30, 2026, Reddit had $2.79B in cash and short-term investments and $20.9M in total debt, resulting in net cash of $2.77B.
What are analysts forecasting for Reddit's earnings and revenue?
For the fiscal year ending December 31, 2026, analysts estimate EPS of $5.39 and revenue of $3.39B. For the following fiscal year, 29 analysts project EPS of $7.10 on revenue of $4.47B.