Key Stats for Reddit Stock
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Current Price:$129.60
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Target Price (Mid):~$247
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Street Target:~$213
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Potential Total Return:~91%
What Happened?
Reddit ( RDDT:NYSE )averaged 2.5 million fewer U.S. daily users in the third quarter than in the second, a 4.7% drop to 50.7 million, according to its Q2 and Q3 releases . U.S. revenue still rose 50% from a year earlier to $719 million. Shares closed at $129.60 on Thursday, October 29, down 3.79% ahead of the after-hours report. They then traded roughly 20% lower in Friday's premarket session, below the 52-week low of $119.27.
The quarter beat on revenue, up 53% to $895 million, and on diluted EPS of $1.40 against the $1.33 TIKR consensus. The call did the damage: management put a number on the search decline, warned total users could shrink this quarter, and committed to moving Reddit behind a login.
Logged-Out U.S. Users Fell 9% in Three Months
The entire net decline came from logged-out users, who fell 9% from the second quarter to 27.3 million. Logged-in U.S. users rose 1% to 23.4 million, and U.S. ARPU climbed to $13.82 from $11.85 in the second quarter.
CEO Steve Huffman said search referrals fell by more than 1 million a week on average in October. "If this rate of decline continues, current trends would suggest that total DAUqs could fall in Q4 by a low double-digit percentage from our current base of 130 million DAUqs," he said. He tied the decline to Google's AI Overviews and AI Mode ("It used to be a traffic driver. Now it's not."). He also said some of the hit reaches logged-in users, since search is a common way people come back.
Fourth-quarter guidance of $1.00 billion to $1.03 billion implies about 40% growth over the $725.6 million reported a year earlier. But the midpoint sits below the roughly $1.045 billion TIKR consensus.
TIKR tracks 34 analysts on Reddit. How many say "Buy"?See the full breakdown of Buy, Hold, and Sell ratings on Reddit, along with Wall Street's revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Reddit's Analyst Ratings
The Login Wall Trades Reach for Price
Reddit will test a logged-in-only experience in select markets outside the U.S. this quarter. "This is a test, but we are going to make this transition," Huffman said, adding that Reddit will "likely be trading reach for engagement." He said logins sharpen ad targeting and make Reddit's content harder to scrape. COO Jen Wong noted that over 80% of monetization already comes from logged-in and app users.
That puts more weight on price per ad. Pricing already outpaced impressions in Q3, and the 2.29% revenue beat was the smallest of the five quarters TIKR shows. CFO Drew Vollero tied it partly to a few particularly strong September days: "there was some bookings that we weren't able to deliver on a couple of days." Fewer logged-out visitors would leave fewer impressions to sell. One lever is barely used: only about 13% of eligible mobile-web users currently see Reddit's app prompt, Huffman said.
Analysts reset fast. KeyBanc downgraded the stock to Sector Weight, and at least six firms cut their targets on Friday morning to between $120 (Bernstein and Cantor Fitzgerald) and $170 (Guggenheim), according to MT Newswires. Every new target sits below TIKR's $212.95 mean, which predates the cuts.
TIKR Advanced Model Analysis
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Current Price:$129.60
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Target Price (Mid):~$247
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Potential Total Return:~91%
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Annualized IRR:~17% / year
The mid case's return is measured from Thursday's $129.60 close, not Friday's lower premarket price. Over its 2025 to 2035 forecast, it assumes revenue growth around 23% a year and net margins around 36%. That path leans on U.S. ARPU, up 53% from a year earlier, and on international users, up 24% from a year earlier to 79.6 million. A 91.5% gross margin supports the margin assumption. Upside comes if the login wall turns visitors into logged-in users who earn more per ad. Downside comes if search losses spread further into logged-in users, which Huffman said is already partly happening.
Conclusion
Two numbers in the Q4 report, expected in early 2027, decide it: revenue at or above the $1.0 billion low end of guidance, and U.S. logged-in daily users holding above 23.4 million. A drop in that logged-in figure would mean search losses have reached Reddit's best-monetizing users.
So what is Reddit stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what Redditcould be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use.
