Reddit, Inc.
Online community platform that earns revenue from advertising sold against its daily users and from licensing its data to AI developers.
- Rating
- Price
- $156.14
- Price target
- $187.00
- Implied return
- +20%
- Market value
- $32.3bn
- Next results
- Not on the calendar
Our view
Vishal Bhargava, CFA · updated Oct 19, 2026Revenue per user, not users, drives Reddit's growth: ARPU supplied 67% of revenue growth over the last four quarters8 (source: Reddit company KPIs (DAUq, WAUq, ARPU) via Signals), and we model it rising from $26 to $46 a year by FY30E on targeting, formats and advertiser count, not list-price increases. Logged-out users, 60% of the base, are still growing 27%1 (source: Reddit 2Q26 shareholder letter), so the price discounts a slowdown, not a collapse. With 91% gross margins and almost no capex, we forecast a 48.0% adjusted EBITDA margin in FY27E, and we deduct stock compensation of 12% of revenue in full.
What could prove us wrong
- US ad-load saturation: a 12% US ARPU shortfall by FY30E, from a finite impression pool, costs $22 a share.
- Logged-out traffic: search referrals were volatile late in 2Q264 (source: Reddit 2Q26 earnings call transcript), and a fall in logged-out users that cuts FY30E revenue by 8% costs $15 a share.
- Margin: four points less adjusted EBITDA margin from FY27E, with stock compensation staying near 12% of revenue, costs $18 a share.
Ask the analyst about RDDT
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