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Exclusive Story from MarketBeat.com Is Reddit's Stock Collapse a Buying Opportunity?Author: Jessica Mitacek. Originally Published: 3/22/2026. 
Key Points - Shares of Reddit are down 43% this year, but the platform is experiencing a surge in users and ad revenue.
- The company’s earnings remain strong, with seven consecutive quarterly beats as well as revenue growth of 69% last year.
- The average 12-month analyst price target suggests that shares of RDDT could see massive potential upside to the tune of 78%.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
Almost exactly two years after its initial public offering (IPO), Reddit (NYSE: RDDT) has become one of the hardest-hit mid-cap stocks of the year. The trouble began last October, when news broke that ChatGPT was reducing its reliance on Reddit for sourcing content for generative responses. A Q4 2025 tech stock sell-off that spilled into 2026 compounded those losses. Your portfolio may look stable right now, but Weiss Ratings is warning that a wealth-destroying event is already unfolding, and most investors are completely unprepared. If your retirement depends on an IRA, 401(k), or blue-chip stocks, the stakes are too high to ignore. Millions were blindsided the first time this happened. Find out what the mainstream media is missing and the exact steps you should take to protect yourself now. See the full warning Today, shares of the online social news aggregation, discussion, and content-sharing platform are down more than 43% year-to-date (YTD) and nearly 48% from their Sept. 19, 2025 all-time high. But for current shareholders and prospective investors, there are several reasons to be bullish on the stock’s longer-term prospects. Breakout 2025 Results Set Up a Confident 2026 Outlook Advertising is Reddit’s principal revenue driver, and 2025 was a banner year for the company. In Q4 alone, ad revenue grew 75% year-over-year (YOY) to $690 million. Lower-funnel performance improved notably, with conversion volumes doubling. That momentum supported stronger capital allocation and guidance. Reddit’s board authorized a $1 billion share repurchase program, and the company issued Q1 2026 revenue guidance of $595 million to $605 million—about 53% YOY growth. Guidance also included adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $210 million to $220 million, following a staggering 200% YOY EBITDA increase in 2025. That performance reflects a rapidly growing user base. In his earnings call comments, cofounder and CEO Steve Huffman said Reddit had over 121 million daily active users in Q4, up 19% YOY, and more than 471 million weekly active users, up 24% YOY. Huffman added that the platform increasingly appeals to users who want to “connect, learn, and research,” calling Reddit “the most human place on the internet…in a world flooded with AI slop.” Ultimately, a larger user base attracts more advertisers, fueling both top- and bottom-line growth at a record pace. Checking Under the Hood: Reddit’s Financials Fuel the Bull Case When Reddit reported full-year and Q4 2025 financials in February, it posted quarterly revenue above $725 million—a company record and well above analyst expectations of roughly $666 million. That revenue growth has become a hallmark for Reddit, which has seen annualized growth climb year after year. On a quarterly basis, growth ranged from more than 61% to nearly 78% last year, finishing 2025 with YOY revenue growth of 69.4%. Meanwhile, the company’s earnings continue to improve. Since missing analyst expectations in Q1 2024—its first report as a public company—Reddit has produced seven consecutive quarterly earnings beats, including EPS of $1.24 in Q4 2025, its largest beat to date on the back of record net income. Analysts expect this revenue momentum to persist, projecting EPS to rise roughly 95% next year, from $1.12 to $2.18 per share. Gross margins also point to strong financial health and have been steadily improving: more than 86% in 2023, above 90% in 2024 (the IPO year), and exceeding 91% in 2025. What Wall Street Is Saying About Reddit RDDT has a consensus rating of Moderate Buy from 29 analysts; 18 of them (62%) rate the stock a Buy. The consensus price target of $242.19 implies potential upside of nearly 78%. Reddit scores higher than 88% of companies evaluated by MarketBeat, a ranking consistent with heavy institutional interest. Over the past 12 months, inflows of more than $10 billion have outpaced outflows of about $4 billion, with 726 buyers versus 303 sellers among institutions. The current short interest of 14.70%—about $2.68 billion worth of shares—is significant but well below the $5.19 billion shorted in September 2025, when short interest peaked. Meanwhile, insider activity included $8.87 million in purchases in Q1—the most meaningful insider buying since the IPO—even though overall insider selling still exceeds buying. | 
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