Reddit Stock Price Forecast - RDDT at $140: RDDT’s High-Growth Engine Meets a Brutal Repricing

Reddit Stock (NYSE:RDDT) – High-Growth Platform Marked Down To A Mid-Teens Multiple

Reddit Stock (NYSE:RDDT) trades around $140.56, down 6.40% on the day and roughly 40% year to date. The tape shows a $26.89B market cap, a $79.75–$282.95 52-week range, a trailing P/E of 53.63 and no dividend. The move from the $150–$210 zone into the low $140s is driven by sentiment and multiple compression, while the operating data still point to very strong growth and expanding profitability.

RDDT Price Action, Liquidity And Trading Context

Reddit printed an intraday range of $140.48–$150.94 with average volume near 6.47M shares. The stock is now trading close to the lower third of its $79.75–$282.95 12-month range, despite fundamentals that have improved since the last time it traded near these levels. At current prices the drawdown from the $280+ high is more than 50%, even though revenue is growing at 70% and margins are rising. That disconnect is what defines the current entry setup.

Revenue Acceleration And Daily Active Users

Fourth-quarter revenue reached $725.6M, up 70% year on year, and came in roughly $60M above a consensus band in the mid-$660M area. Growth accelerated from 68% in the prior quarter, which is unusual at this scale. Daily active users rose to 121.4M, growing 19% YoY and adding 5.4M net DAUs in one quarter. U.S. DAUs increased by about 0.9M sequentially, reversing the earlier dip of 0.2M that had triggered worries about domestic saturation. International DAUs added roughly 4.5M sequentially, with ex-U.S. growth above 28%, showing that the translation and product changes are opening new markets, not just recycling existing traffic.

Engagement Quality, ARPU And Ad Mix

Monetization is expanding faster than the user base. Global ARPU climbed 42% year on year to around $5.98, while U.S. ARPU jumped 53% to roughly $10.79. That ARPU lift came from a deeper performance-ad mix rather than pure price hikes. Revenue from lower-funnel objectives such as purchase conversions and app installs doubled year on year, as machine-learning optimization and new ad formats like shopping ads and Reddit Max campaigns improved conversion and reduced cost per click. Both large accounts and the scaled mid-market and SMB segment grew at mid- to high-double-digit rates, with SMB revenue roughly doubling. Active advertiser count increased more than 75% in Q4, showing that the ad engine is scaling across many cohorts, not just a handful of big spenders. Across verticals, 11 of the top 15 sectors delivered revenue growth of 50%+, with retail, pharma, financial services and tech leading the group. Management highlighted that impression growth was the primary revenue driver, with CPMs also rising as outcomes improved, which confirms that engagement quality is backing the topline, not simply more ad load.

Margin Structure, Cash, Buyback And Earnings Power

On profitability, Reddit (NYSE:RDDT) is already running at margins that many mature platforms struggle to reach. Adjusted EBITDA hit $327M in Q4, up 112% YoY, with a margin of 45.1%, about 900 bps higher than the prior year. GAAP net margin stood at 34.7%, which is rare at this growth rate. Operating expenses excluding stock compensation rose only 41%, far below the 70% revenue growth. Stock-based compensation actually declined ~6% year on year, easing dilution concerns. For Q1, management guided revenue to $595–$605M, implying 52–54% growth, and adjusted EBITDA around $215M, a 35.8% margin, up roughly 640 bps versus the 29.4% margin in Q1 2025. Consensus sees FY26 revenue around $3.15B (about 43% growth) and adjusted EBITDA near $1.40B (roughly 66% growth) if mid-40s margins hold. The balance sheet carries about $2.48B in cash and no debt, leaving the company in a net-cash position even after the selloff. A new $1B share repurchase authorization allows management to retire stock at prices that now embed a far lower multiple than at the time of the IPO. With revenue and EBITDA compounding at 40–70% and capital requirements modest, free-cash-flow capacity is set to climb quickly if the current margin discipline is maintained.

Valuation Versus Growth: EV, EBITDA And Long-Term Multiples

At $140.56 per share and a $26.89B market cap, backing out roughly $2.48B of cash leaves enterprise value near $24.4B. Against the $1.40B FY26 adjusted EBITDA estimate, RDDT trades around 17–18x EV / FY26 EBITDA. Using a long-term framework with revenue at $3.15B and a 40% net margin implies net income near $1.26B; on that earnings power, the current price reflects a 21–22x P/E on medium-term numbers. That multiple is not cheap in absolute terms, but it is low relative to a profile that combines 40–70% top-line growth, EBITDA growth above 60%, high-30s to mid-40s margins and net cash. The rerating from a premium AI-adjacent multiple to this high-teens EV / EBITDA band has already happened; the underlying growth engine has not broken

Product Roadmap, AI Tailwinds And Competitive Position

Product execution is aligned with where online behavior is moving. The shift to a search-forward interface is designed for a world where users start sessions with queries and expect high-relevance answers. Reddit reports more than 80M people searching directly on the platform every week, a volume that deepens the intent layer and supports higher-value ad formats. Machine translation now covers about 35 languages, which has driven the 28%+ international DAU growth and gives the platform better leverage in non-English markets where competitors are less entrenched. Verified profiles for public figures add credibility and make the site more attractive for domain experts and niche communities, reinforcing the “community of record” positioning for many topics. Data-licensing revenue stood around $36M in the last quarter, still small relative to the core ad business, and management has framed future agreements more as product partnerships than pure licensing. That approach keeps the focus on user growth and engagement while treating AI demand as an incremental layer rather than the main pillar of the model. Relative to other social networks, Reddit’s structured communities and long-tail discussions are harder to replicate quickly, even if generative AI makes new forum creation easier; that structural advantage is reflected in the strong ARPU and impression growth.

Governance, Insider Flows And Structural Risks

Regulatory and platform risks are real and need to be priced. Proposed under-16 social media restrictions in several jurisdictions can cap growth in younger cohorts over time and may require additional compliance investment. Macro slowdown and weaker consumer spending could pressure ad budgets and compress pricing, especially in discretionary categories, which would test the resilience of the current 50%+ growth rates. Data-licensing revenues may flatten or decline as AI models reduce dependency on Reddit content or renegotiate terms. Competitive threats from larger platforms are always present, especially as META and others roll out AI-enhanced discovery and forum-like features. That said, Reddit (NYSE:RDDT) enters this environment with a clean balance sheet, strong GAAP profitability, and a newly approved $1B repurchase plan. Public disclosures have also highlighted insider buying at lower prices, which aligned management with shareholders; for ongoing governance and insider patterns, monitoring the dedicated page on Reddit insider transactions adds another layer of confirmation.

Reddit Stock (NYSE:RDDT) – Buy, Sell Or Hold At $140

At around $140.56, Reddit Stock (NYSE:RDDT) offers a mix of factors that is rare at this stage of a listing: 70% revenue growth, 19% DAU growth, ARPU up 42–53%, adjusted EBITDA margin above 45% in the latest quarter, GAAP net margin above 34%, net cash around $2.48B, and a forward EV / EBITDA multiple in the high-teens on FY26 numbers. The drawdown has reset expectations and compressed the valuation to levels that assume a sharp deceleration, margin erosion, or structural damage that the current data do not show. Short-term volatility will stay elevated, but on the numbers now visible the risk-reward skews positive. On that basis, the stance here is Buy, with upside driven by sustained 40%+ top-line growth, continued margin expansion and the ability of Reddit (NYSE:RDDT) to grow into and then outgrow its current valuation band.

That's TradingNEWS