Reddit Surges Following Strong Q3 Earnings Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 30 2025
0mins
Should l Buy RDDT?
Source: TipRanks
Earnings Performance: Reddit reported a strong third-quarter earnings with an EPS of $0.80, surpassing estimates of $0.53, and sales increased by 68% year-over-year to $585 million, exceeding forecasts of $549.12 million.
User Growth Concerns: Despite strong financial results, investor focus shifted to slowing user growth in the U.S., where daily active users grew by only 7%, compared to 12% in the previous quarter, although global daily active users increased by 19% year-over-year.
Revenue Expectations: For the fourth quarter, Reddit anticipates revenue between $655 million and $665 million, significantly higher than Wall Street's estimate of $638 million, with adjusted earnings projected between $275 million and $285 million.
Analyst Ratings: Analysts maintain a Strong Buy consensus on RDDT stock, with 16 Buys and eight Holds, and an average price target of $237.87 per share, indicating a potential upside of 22.4%.
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Analyst Views on RDDT
Wall Street analysts forecast RDDT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RDDT is 260.00 USD with a low forecast of 207.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Analyst Rating
14 Buy
8 Hold
0 Sell
Moderate Buy
Current: 165.410
Low
207.00
Averages
260.00
High
325.00
Current: 165.410
Low
207.00
Averages
260.00
High
325.00
About RDDT
Reddit, Inc. operates a social platform, Reddit. Reddit is a community of communities. It is built on shared interests, passion, and trust and is home to open and authentic conversations on the Internet. Reddit is a global, digital city where anyone in the world can join a community to learn from one another, engage in authentic conversations, explore passions, research new hobbies, exchange goods and services, create new communities and experiences, share a few laughs, and find belonging. Reddit has thousands of communities, endless conversations, and authentic human connections. Communities on Reddit are organized based on specific interests and are called subreddits. Reddit offers real-time access to evolving and dynamic topics, such as sports, movies, news, fashion, and the latest trends. On Reddit, users can submit, vote, and comment on the topics they care about. It has approximately 100,000+ active communities and approximately 101+ million daily active visitors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Upward EPS Revisions: Over the past three months, EPS estimates have seen five upward revisions with no downward adjustments, indicating increased analyst confidence in the company's profitability, which could positively impact its stock price.
- Revenue Estimate Adjustments: Revenue estimates have experienced 19 upward revisions and one downward revision, showcasing a bullish market sentiment regarding Reddit's growth potential in a competitive social media landscape, likely attracting more investor interest.
- Market Environment Challenges: While Reddit faces growth demands similar to Meta and tougher market challenges, its strong earnings outlook may help maintain competitiveness among investors, especially in light of increasing regulatory scrutiny on social media platforms.
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- Upward EPS Revisions: Over the past three months, EPS estimates have seen five upward revisions with no downward adjustments, indicating increased analyst confidence in the company's profitability, which could positively impact its stock price.
- Revenue Estimate Adjustments: Revenue estimates have experienced 19 upward revisions and one downward revision, showcasing a bullish market sentiment regarding Reddit's growth potential in a competitive social media landscape, likely attracting more investor interest.
- Market Environment Challenges: While Reddit faces growth demands similar to Meta and tougher market challenges, its strong earnings outlook may help maintain competitiveness among investors, especially in light of increasing regulatory scrutiny on social media platforms.
See More
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- Technical Oversold Indicators: Reddit's relative strength index has dropped to 21, indicating the stock is in oversold territory, with a 29% decline over the past year, significantly underperforming the S&P 500's 15% gain, raising concerns about its fundamentals.
- Analyst Optimism: With 31 analysts covering Reddit, the 12-month average price target stands at $252.39, implying a 65% upside from its last close, reflecting market confidence in its future performance despite current pressures.
- Positive Earnings Expectations: Wall Street anticipates Reddit will report approximately $667 million in revenue for Q4, a 14% year-over-year increase, alongside an EBITDA of around $287 million, representing a 21% quarter-over-quarter growth, indicating potential improvements in revenue and profitability.
- Retail Sentiment Shift: On Stocktwits, retail sentiment has flipped from 'bullish' to 'extremely bullish' in the past 24 hours, with 79% of users expecting Reddit to beat both revenue and earnings forecasts, signaling strong market anticipation for the upcoming earnings report.
See More
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- Capital Expenditure Forecasts: Alphabet has crossed the $400 billion annual revenue mark for the first time and projected AI-related capital expenditures of $175 billion to $185 billion for 2026, raising investor concerns but also boosting Nvidia and Broadcom shares in after-hours trading.
- Silver Price Volatility: Silver prices plummeted over 15% in just two days, derailing a rebound; however, the iShares Silver Trust (SLV) and SPDR Gold Shares (GLD) continue to see extremely bullish retail sentiment, indicating sustained investor interest in precious metals.
- Amazon Earnings Focus: Investors are keenly awaiting Amazon's (AMZN) earnings report, particularly for updates on AWS growth and AI efficiency, which are expected to significantly impact its stock price.
- Microsoft Downgrade: Stifel downgraded Microsoft (MSFT) to Hold with a price target cut from $540 to $392, primarily due to Azure supply issues and increasing competition from Google and Anthropic, reflecting a cautious market sentiment towards the software sector.
See More
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- Extreme Price Volatility: On Thursday, spot silver prices fell by 13% to $76.97 per ounce, while futures dropped over 8%, reflecting extreme market volatility that undermines investor confidence.
- Speculative Trading Impact: Analysts indicate that recent price swings are primarily driven by speculative flows and leveraged positions rather than physical demand, suggesting unstable market sentiment that could lead to further price corrections.
- Increased Margin Requirements: The CME Group raised margin requirements following last Friday's steep sell-off, a move that may suppress speculative activity and impact market liquidity, potentially exacerbating price volatility.
- Market Comparisons: The volatility in silver prices has drawn parallels to meme stocks like GameStop from 2021, with market watchers warning that silver prices have detached from sustainable levels, which could lead to increased speculative trading and market instability.
See More
Steve Ladd Huffman Executive Update
- Executive Appointment: Steve Ladd Huffman continues as CEO and President as of January 30, 2026, holding a 10% stake in the company, demonstrating his strong confidence in the company's future development.
- Board Role: As a board member, Huffman's leadership will continue to influence the company's strategic direction, particularly in technology innovation and market expansion.
- Shareholder Confidence: Huffman's ongoing tenure may enhance investor confidence in corporate governance and long-term growth potential, especially in a rapidly changing market environment.
- Future Outlook: Under Huffman's leadership, the company is likely to increase investments in new product development and market expansion to address industry competition and meet customer demands.
See More
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- Earnings Call Scheduled: Reddit is set to host a conference call on February 5 to discuss its Q4 and full-year 2025 financial results, with market expectations suggesting potential positive impacts on stock performance.
- Price Trend Analysis: Currently, Reddit's stock is trading 19.1% below its 20-day simple moving average and 17.4% below its 100-day SMA, indicating a bearish trend in the short term, reflecting ongoing challenges in maintaining upward momentum.
- Earnings Expectations and Analyst Views: The EPS estimate stands at $0.94 (up 161% YoY), with revenue expected at $667.33 million (up 56% YoY), and despite a P/E ratio of 81.6x, analysts believe this growth justifies the premium valuation.
- Market Performance and Technical Indicators: Reddit shares rose 2.17% to $181.00 in premarket trading, although the RSI at 27.71 indicates an oversold condition, suggesting the stock may be undervalued, while the MACD indicates continued bearish pressure, warranting caution in the short term.
See More
