Update shared on26 Sep 2025
Fair value Increased 9.58%Analysts have raised Reddit’s price target to $219.15, citing accelerating ad momentum, product improvements, and strong Q2 results—though some remain cautious on valuation and user growth.
Analyst Commentary
- Bullish analysts see accelerating advertising momentum, with dynamic product ads expected to boost mid- and lower-funnel growth, providing incremental revenue streams and validating Reddit’s monetization strategy.
- Continual product and platform improvements—including a feed redesign, integration of Answers in search, and international expansion—are viewed as multi-year catalysts supporting further user engagement and top-line outperformance.
- Stronger than expected Q2 results, increased ad portal activity, higher margins, and upward revisions to daily active user estimates are driving price target upgrades.
- Shifts in digital ad spend, particularly declines at TikTok, are leading to greater advertiser interest in Reddit, while exposure to new regulatory risks (such as U.S. pharma advertising changes) is seen as manageable but notable.
- Some Bearish Analysts maintain caution due to factors like valuation premium, slowing user growth, tough second-half revenue comps, and uncertainty regarding the sustainability of recent momentum.
What's in the News
- Reddit (RDDT) is in early talks with Alphabet (GOOG, GOOGL) for a new generative AI content-sharing deal, following a prior agreement reportedly worth $60M; the current discussions involve potential “deeper integration with Google’s AI products” (Bloomberg, 2025-09-17).
- Reddit’s role in the “meme stock” trend remains notable, as its platform has been instrumental in recent speculative surges, with companies like Kohl’s (KSS), Opendoor (OPEN), and Locafy (LCFY) seeing dramatic stock moves linked to Reddit forum activity (Forbes, 2025-07-23).
- A group of U.S. investors, including Oracle (ORCL), Silver Lake, and Andreessen Horowitz, is set to control TikTok’s U.S. operations under a proposed deal; Reddit is consistently mentioned alongside Meta (META), Pinterest (PINS), and Snap (SNAP) as publicly traded social media peers impacted by these developments (multiple: WSJ, Bloomberg, Reuters, 2025-09).
- The TikTok agreement reportedly involves the new U.S. entity leasing ByteDance's algorithm, retrained by Oracle, with data and privacy managed stateside; the arrangement is expected to shift competitive dynamics in the social media sector, including for Reddit (Axios, Fox News, 2025-09-23/22).
- Regulatory and competitive news, such as Italy’s significant VAT claim against social media firms and TikTok’s major user growth in Europe, continue to influence the landscape in which Reddit operates, highlighting sector-wide scrutiny and growth opportunities (Reuters, 2025-09-05; 2025-07-22).
Valuation Changes
Summary of Valuation Changes for Reddit
- The Consensus Analyst Price Target has risen from $200.00 to $219.15.
- The Future P/E for Reddit has risen slightly from 52.68x to 55.08x.
- The Net Profit Margin for Reddit has risen slightly from 27.45% to 28.45%.
Disclaimer
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