Reddit, Inc. (NASDAQ:RDDT) stock is trading higher Friday after the company reported strong fourth-quarter and full-year financial results, signaling continued momentum in its business performance.
Investor optimism around the earnings update and stronger profitability appears to be driving the early move, supported by solid revenue growth and upbeat forward guidance.
The stock’s advance also comes alongside a generally upbeat tone across markets, as major benchmarks such as the Nasdaq and S&P 500 posted gains in the prior session, providing additional support for risk-on sentiment.
Reddit’s Q4 Revenue Soars 70%, Announces $1B Buyback
In the fourth quarter of 2025, Reddit delivered strong financial results, with revenue rising 70% year over year to $726 million. Net income reached $252 million, while adjusted EBITDA grew to $327 million, reflecting improving profitability. User engagement also expanded, as Daily Active Uniques (DAUq) increased 19% to 121.4 million, highlighting continued platform growth.
For the full year 2025, Reddit reported revenue growth of 69% to $2.2 billion, driven largely by a 74% increase in advertising revenue. The company also generated solid cash flow, supported by strong margins near 45% in the quarter.
For the first quarter of 2026, Reddit expects revenue in the range of $595 million to $605 million, above the analyst estimate of $577.170 million, and adjusted EBITDA of $210 million to $220 million, signaling continued momentum.
The company’s board approved a $1 billion share repurchase program for its Class A common stock, with no expiration date, and it can be paused or discontinued at Reddit’s discretion.
The broader market saw gains on the previous trading day, with the Technology sector rising 1.86%. Reddit’s stock movement reflects this positive sentiment, indicating that it is moving in tandem with broader market trends.
Reddit Stock Faces Bearish Trend, RSI Indicates Oversold
The stock is currently trading 21.5% below its 20-day simple moving average (SMA) and 26.1% below its 50-day SMA, suggesting a bearish short-term trend. Over the past 12 months, shares have decreased by 30.23% and are positioned closer to their 52-week lows than highs.
The RSI is at 21.58, which is considered oversold territory, suggesting that the stock may be due for a rebound. Meanwhile, MACD is below its signal line, indicating bearish pressure on the stock.
The combination of oversold RSI and bearish MACD suggests mixed momentum for Reddit’s stock.
- Key Resistance: $164.50
- Key Support: $138.00
Reddit’s Next Report: Analysts Eye Growth
Investors are looking ahead to the next earnings report on April 30, 2026.
- EPS Estimate: 94 cents (Up from 13 cents YoY)
- Revenue Estimate: $667.23 million (Up from $392.36 million YoY)
- Valuation: P/E of 57.7x (Indicates premium valuation)
Analyst Consensus & Recent Actions:
The stock carries a Buy Rating with an average price target of $253.36. Recent analyst moves include:
- Needham: Buy (Maintains Target to $300.00) (Feb. 6)
- Roth Capital: Neutral (Raises Target to $215.00) (Jan. 30)
- Guggenheim: Buy (Maintains Target to $245.00) (Jan. 23)
Valuation Insight: While the stock trades at a premium P/E multiple, the strong consensus and rising estimates suggest analysts view the growth prospects as justification for the 54% upside to analyst targets.
Reddit’s Benzinga Edge Scorecard Analysis
Below is the Benzinga Edge scorecard for Reddit, highlighting its strengths and weaknesses compared to the broader market:
- Value: 10.06 — Trading at a steep premium relative to peers.
- Momentum: 7.52 — Stock is underperforming the broader market.
The Verdict: Reddit’s Benzinga Edge signal reveals a classic ‘High-Flyer’ setup. While the Value score indicates a premium valuation, the low Momentum score suggests the stock is currently underperforming the broader market.
Significant ETF Exposure to Reddit Stock
- Pacer US Large Cap Cash Cows Growth Leaders ETF (NASDAQ:COWG): 3.21% Weight
- Adaptive Alpha Opportunities ETF (ARCA :AGOX): 3.51% Weight
- Innovator Deepwater Frontier Tech ETF (NYSE:LOUP): 5.17% Weight
Significance: Because RDDT carries significant weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the ETFs.
RDDT Price Action: Reddit shares were up 9.24% at $165.00 during premarket trading on Friday, according to Benzinga Pro data.
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