SAN FRANCISCO, August 11, 2026, 13:40 EDT
- Reddit shares were last at $158.42, up just 0.5% from the company’s second-quarter buyback level.
- Revenue for the quarter increased by 61%, while daily user growth in the U.S. decelerated to 6%.
- Analysts project an average upside of 37.8%, with price targets spanning from $142 to $300.
Shares of Reddit, Inc. NYSE:RDDT hovered near the company’s recent buyback level on Tuesday, edging down 0.2% to close at $158.42. That put the stock just 85 cents above the $157.57 average price per share paid by Reddit in the previous quarter.
The slim margin highlights the ongoing valuation debate. While revenue and cash flow are rising sharply, investors remain cautious about the long-term reliability of search-related traffic.
The market is accepting current earnings but is factoring in a more challenging growth trajectory.
| Reddit market snapshot | August 11 reading | Investor comparison |
|---|---|---|
| Share price | $158.42 | Decreased by 0.19% |
| Q2 buyback price | $157.57 | Shares now trading 0.5% higher |
| Market value | $30.48 billion | 36.8 trailing P/E |
| 52-week range | $119.27-$282.95 | Trading 44.0% under its peak |
| Intraday range | $156.56-$161.98 | Start price was $158.00 |
The share repurchase stands out. The company’s leadership acquired 1.5 million shares at a cost of $235 million in the second quarter. The stock price is now trading close to the average purchase price.
The operational figures were significantly higher. Revenue totaled $804.9 million, representing an eighth consecutive quarter with growth exceeding 60%.
| Second-quarter measure | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $804.9 million | $499.6 million | up 61% |
| Net income | $252.8 million | $89.3 million | up 183% |
| Adjusted EBITDA | $343 million | $167 million | up 106% |
| Free cash flow | $261 million | $111 million | up 135% |
| Diluted EPS | $1.25 | $0.45 | up 178% |
Free-cash-flow margin was approximately 32%. Net margin increased to 31.4% compared with 17.9%. The data reflect genuine operating leverage, rather than simply a rise in sales.
Chief Executive Steve Huffman stated that “the value of real human perspective has never been higher” as the web becomes more automated. He pointed to over 60% revenue growth for eight quarters running. Reddit earnings release
The cautious approach is explained by the user mix. While international traffic is increasing at a faster pace, U.S. users continue to have significantly higher value.
| Q2 geographic measure | United States | International | Growth gap |
|---|---|---|---|
| Revenue | $638.1 million | $166.8 million | +56% vs. +84% |
| Daily active uniques | 53.2 million | 77.1 million | +6% vs. +28% |
| Average revenue per unique | $11.85 | $2.26 | +51% vs. +31% |
| Weekly active uniques | 197.2 million | 317.4 million | +9% vs. +35% |
Average U.S. revenue per unique was 5.2 times that of international users. This means U.S. user growth is more significant than the top-line global numbers indicate.
“Search referrals were inconsistent during the quarter, and traffic swings increased toward the end of the period,” Huffman told investors. Ongoing market coverage on Tuesday renewed attention to those issues. TIKR, August 11; Reuters
Wall Street sentiment remains positive. Out of 23 ratings issued recently, 14 were Buys, and none were Sells over the past three months.
| Analyst or consensus | Rating | Target | Upside/downside |
|---|---|---|---|
| J.P. Morgan, August 4 | Hold | $185 | +16.8% |
| Phillip Securities, August 3 | Buy | $230 | +45.2% |
| Roth MKM, August 3 | Hold | $145 | -8.5% |
| Needham, July 31 | Buy | $300 | +89.4% |
| 23-analyst consensus | 14 Buy / 9 Hold / 0 Sell | $218.32 average | +37.8% |
The average price target points to significant potential gains. The spread between $142 and $300 highlights considerable divergence regarding traffic risks and the durability of earnings multiples.
| Capital-allocation measure | Q2 value | Context |
|---|---|---|
| Shares repurchased | 1.5 million | Class A common shares |
| Cash spent | $235 million | Represents roughly 8% of cash and securities |
| Average repurchase price | $157.57 | Price was $0.85 under the current market level |
| Cash and marketable securities | $2.786 billion | Balance sheet remains strong |
Reddit allocated only a small portion of its available cash for the buyback, maintaining flexibility for further investments even as it backs the share price. Additional buybacks are still optional.
Risks: Modifications in Alphabet Inc.’s NASDAQ:GOOGL Google Search may lead to fewer referrals. Rapid shifts in ad demand, user retention via direct apps, and increased competition are also possible. The trailing earnings multiple of 36.8 times gives limited cushion if user growth slows for an extended period.
Reddit forecasts third-quarter revenue between $860 million and $870 million, with adjusted EBITDA anticipated in the range of $385 million to $395 million. The upcoming focus is on demonstrating that direct user engagement can counterbalance fluctuating search traffic while maintaining strong U.S. monetization.
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