Reddit Stock (NASDAQ:RDDT) Soars to $259.55 as Revenue and Users Surge

NASDAQ:RDDT Rockets to Record Highs as Revenue Growth, Data Licensing, and User Expansion Drive Bullish Momentum

NASDAQ:RDDT surged past $259.55, gaining more than 8% intraday, and setting fresh all-time highs as Jefferies lifted its price target to $300 from $230 while maintaining a Buy rating. The stock has delivered a staggering 356% return over the past year and is now up 58.8% year-to-date, dwarfing the S&P 500’s 10.9% gain. The move reflects confidence in Reddit’s accelerating monetization model, with Wall Street analysts increasingly pointing to underappreciated upside in data licensing revenues and ad monetization.

Revenue Acceleration and Earnings Surprises Keep Momentum Alive

Reddit’s latest quarterly report underscored a company in hypergrowth. Q2 2025 revenue hit $499.6 million, well ahead of consensus, with net income of $89.3 million and EPS of $0.45, smashing estimates by 138%. Analysts now forecast Q3 EPS of $0.49 on revenue of $542.9 million, while Q4 projections climb to $0.76 EPS and $627 million in revenue. For the full year, Reddit is expected to post $2.07 billion in sales, up nearly 59% year-on-year, and $1.87 EPS, a turnaround from losses just a year earlier. Growth is forecast to moderate in 2026 to 25.9% revenue expansion, still well ahead of S&P 500 averages.

User Base Expansion and Advertiser Adoption Fuel Growth

Global daily active users jumped 21% to 110.4 million, handily beating expectations, reinforcing Reddit’s ability to expand beyond its traditional community-driven base. The surge in user activity has been matched by rising advertiser adoption, which increased by 50% in the last twelve months as brands tap into Reddit’s contextual ad inventory. With gross margins standing at an enviable 91%, Reddit’s operating leverage remains formidable, converting user growth directly into profit expansion. Deutsche Bank raised its target to $205, Morgan Stanley lifted to $230, and BofA to $180, all citing the combination of strong user metrics and rising ad load efficiency.

Valuation Metrics and Market Capitalization Surge

At today’s highs, Reddit’s market capitalization has swelled to $48.6 billion, with a trailing P/E ratio of 116.4 and forward P/E of 84.0. Price-to-sales sits at a lofty 25.7x, reflecting aggressive growth expectations, while EV/EBITDA at 291x underscores the premium investors are willing to pay for scale. Revenue per share of $9.34 highlights per-user monetization momentum. Levered free cash flow of $290.6 million and total cash reserves of $2.06 billion give the company flexibility to pursue expansion and potential M&A.

Insider Transactions and Institutional Behavior

Despite the stock’s meteoric run, insider selling has been relentless. According to insider transaction data, CEO Steve Huffman sold over 613,000 shares worth $76.6 million, COO Jennifer Wong offloaded 270,819 shares for $43.6 million, and CFO Andrew Vollero sold 260,000 shares worth $34.8 million in the past six months. Insiders executed more than 319 sales versus just 3 purchases during the period. Yet institutional demand offsets this supply: BlackRock boosted holdings by 2.1 million shares (+48.7%), Baillie Gifford added 5.7 million shares (+764%), and Tiger Global expanded its stake by nearly 90%. Hedge funds like AllianceBernstein and FMR trimmed exposure, but net flows remain positive, supporting the rally.

Analyst Ratings and Price Target Dispersion

Twenty-four analysts now cover Reddit, with a median target of $180, but upside calls dominate the headlines. Jefferies sees $300, Raymond James and JMP Securities both stand at $225, Guggenheim and Needham at $215, and Morgan Stanley at $230. RBC maintains a more conservative $210 Sector Perform, while JP Morgan holds Neutral at $190. The bullish camp emphasizes Reddit’s ability to capture an additional 65 basis points of U.S. digital ad market share by 2029, bringing it in line with peers like Pinterest and Snap.

Performance Context Against Sector and Peers

Reddit’s 452% three-year return dwarfs the S&P 500’s 60% gain, putting it in elite company among internet growth names. Market peers tell a mixed story: Meta Platforms trades at $1.9 trillion valuation, Alphabet at $2.9 trillion, and Pinterest at $24.1 billion. Unlike Snap, which is struggling at $7.07 per share, Reddit has turned its community base into a profitable and scalable engine. Its EV/Revenue multiple at 25.7x is more aggressive than Meta’s or Alphabet’s, but investors appear willing to pay for higher growth acceleration.

Verdict on NASDAQ:RDDT

At $259.55, Reddit trades at the top of its historical range after a 301% 52-week change and sits just below its fresh high of $261.13. The company’s fundamentals justify optimism, with accelerating EPS growth, record user engagement, and expanding advertiser penetration. Risks stem from heavy insider selling, lofty valuation multiples, and heightened competition in digital ad monetization. Still, with analyst targets clustered between $210 and $300, institutional flows robust, and forward growth superior to most peers, NASDAQ:RDDT is a Buy for momentum-driven investors eyeing a medium-term push toward $300, though volatility and drawdowns should be expected given its extreme 63 moves greater than 5% in the past year.

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