What Analysts Think of Reddit Stock Ahead of Earnings

Reddit (RDDT) is set to report fourth-quarter earnings after the market closes Wednesday, with analysts expecting growing revenue and users.

The social media company is expected to report revenue of $408.92 million, up 64% year-over-year, and earnings of $47.6 million, sharply higher from Reddit’s $18.53 million in the year-ago quarter. Analysts project 103.24 million daily active users, up from 73.10 million a year ago. 

Of the 11 analysts who follow Reddit and are tracked by Visible Alpha, eight have a “buy” or equivalent rating for Reddit stock, compared with three “hold” ratings. However, their average price target of roughly $206 would represent a 9% decline from the stock’s closing price of $224.93 Monday after hitting a record high Friday. The stock has climbed nearly 40% since the start of the year alone, quickly blowing past most targets set in January.

Deutsche Bank Raises Reddit Price Target

Deutsche Bank analysts upgraded their price target to $235 from $195 on Monday, pointing to near-term revenue upside from growth in daily active users and advertising revenue. Reddit Answers, an artificial intelligence tool that generates summaries of posts and comments, could also drive advertising revenue by becoming “a segue to capturing search budgets via promoted links,” the analysts said.

In December, Morgan Stanley said Reddit could have “multiple levers to drive outsized growth” in 2025, including a partnership with Alphabet’s Google (GOOGL) directing searches to Reddit links. A larger user base that spends more time on the platform would also make Reddit more attractive to advertisers, which could bring Reddit’s ad pricing closer to competitors like Google and Meta Platforms (META), the analysts wrote.

Shares of Reddit were little changed and slightly lower Monday after closing at an all-time high Friday. The stock has soared nearly sevenfold from its initial public offering price of $34 in March 2024.