| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 19 | 36.7x | 17.8x | Bottom tier | |
Growth | 97 | 66.6% | 7.1% | Top tier | |
Quality | 95 | 27.2% | 4.5% | Top tier | |
Safety | 97 | — | 2.6x | Top tier | |
Capital Return | 65 | — | 2.12% | Around median | |
Momentum | 34 | -32.6% | 2.9% | Bottom tier | |
Sentiment | 49 | 22 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Reddit operates a platform of communities and conversations where users create posts and comments within hundreds of thousands of specialized communities. Most revenue comes from selling advertising targeted at high-intent audiences, alongside other revenue that includes data licensing; in fiscal Q2 2026, advertising revenue reached $762 million, or approximately 94.7% of total revenue, while other revenue reached $43 million. The commercial growth strategy relies on increasing the value of ad impressions through Reddit Max, Dynamic Product Ads, app-install ads, and video ads, while expanding access to small and medium-sized businesses through Shopify and the Ads API.
In fiscal Q2 2026, revenue increased 61% year over year to $804.9 million, marking the eighth consecutive quarter in which growth exceeded 60%, and gross profit reached $734.6 million at a 91.3% gross margin. Net income reached $252.8 million, and diluted earnings per share were $1.25, compared with $0.45 a year earlier, while the adjusted EBITDA margin was 43%. Advertising revenue grew 64% to $762 million, compared with 24% growth in other revenue to $43 million, while U.S. revenue increased 56% and international revenue increased 84%.
Reddit ended fiscal Q2 2026 with $2.8 billion in liquidity from cash and cash equivalents and marketable securities, after operating cash flow doubled to $262 million and capital expenditures did not exceed $1 million. On a trailing-twelve-month basis through the same quarter, operating cash flow exceeded $1 billion for the first time, alongside revenue per employee reaching $1 million. The company repurchased approximately 1.5 million shares for $235 million at an average of approximately $157 per share, with approximately $760 million remaining under the existing repurchase authorization.
The analyst consensus rates RDDT a “Buy,” with an average price target of $204.4, but the wide range between $110 and $265 reveals substantial divergence in estimates of the user trajectory and advertising growth. The average target is approximately 28% below the 52-week range high of $282.95, while the stock's repricing during July and August 2026 was associated with a combination of declining U.S. daily users and volatile Google referrals, followed by institutional demand resulting from inclusion in the S&P 500. Given the absence of a confirmed price-to-earnings ratio among the live facts provided, profit margins, cash flow, and the expected growth slowdown provide more reliable anchors than relying on an unavailable multiple.
Figures in the text are as of 2026-08-28; the live price is shown at the top of the page.
Advertising revenue accounted for $762 million, or approximately 94.7% of total revenue of $804.9 million in fiscal Q2 2026. Other revenue, which includes activities such as data licensing, reached $43 million and grew 24% year over year. Advertising expansion relies on products such as Reddit Max, Dynamic Product Ads, app-install ads, and video ads, with total advertising revenue growing 64% year over year.
Reddit reported diluted earnings per share of $1.25 versus expectations of $0.95, and revenue increased 61% to $804.9 million. However, U.S. daily active users declined sequentially to 53.2 million from 53.5 million, and management discussed the volatility and reduced visibility of Google referrals on July 30, 2026. Concerns about user growth and reliance on search for discovery outweighed the strength of the results, and on July 31, 2026, the stock recorded its worst one-day decline since its initial public offering, falling 23%.
Reddit Max is an advertising automation suite that uses artificial intelligence to improve targeting, creative, and performance, and the number of advertisers using it increased by more than 60% from fiscal Q1 to fiscal Q2 2026. During the same period, Max revenue grew by more than 150%, and Lenovo achieved 40% higher purchase value compared with standard campaigns. In fiscal Q2 2026, Reddit added an app-install objective and the tailored creatives feature, and app campaign tests showed an average 15% reduction in cost per action and a 28% increase in result volume.
Automated analysis for informational purposes only — not investment advice.
The platform reached more than half a billion weekly users and more than 130 million daily users, and new app-user retention increased 50% year over year on a relative basis. Accumulated content also reached 26 billion posts and comments after adding 1 billion since fiscal Q1 2026, and posts and comments per logged-in daily user increased. However, U.S. daily active users declined sequentially by 300 thousand to 53.2 million, so the improvement in usage quality has not yet translated into continuous growth across all audience metrics.
The company expects revenue of between $860 million and $870 million in fiscal Q3 2026, equivalent to year-over-year growth of between 47% and 49%. It expects adjusted EBITDA of between $385 million and $395 million, with a 45% margin at the midpoint and year-over-year growth of between 63% and 67%. It also lowered its estimate for stock-based compensation expense for fiscal 2026 from a high-teens percentage to a low- or mid-teens percentage, while expecting annual dilution to be at the low end of the 1%-3% range before the effect of repurchases or acquisitions.
RDDT entered the S&P 500 on August 18, 2026, replacing AvalonBay Communities, expanding its presence in institutional portfolios. JPMorgan estimated that index funds needed to purchase approximately 16.7 million Reddit shares to match the index weighting, creating mechanical demand and increasing expected liquidity. The inclusion does not address the risks of volatile search referrals or declining U.S. daily users, so it remains a catalyst related more to market flows than to a change in the economics of the business.
