Reddit - AI Stock Analysis

Analysis generated January 15, 2026

Reddit is a social media platform where users can post content, engage in discussions, and join community-driven forums called "subreddits." The platform has become a central hub for diverse topics ranging from popular culture to niche interests, making it a unique space for interaction and information exchange.

With its growing user base, Reddit has diversified its revenue streams through advertising, premium membership, and various partnerships. The company has shown significant growth in its user engagement and has consistently worked on enhancing its platform to improve the user experience.

Fundamental Analysis

Reddit has reported a revenue of $585M in the last quarter, marking an increase of 17.07% compared to the preceding quarter. This significant increase is a positive indicator of the company's ability to generate higher income and sustain growth. On a year-over-year basis, the revenue has increased by 67.91%, highlighting strong performance and potential for further scaling.

The net income for the last quarter was $163M, which is an impressive 82.16% increase compared to the previous quarter. This surge is a robust signal of profitability and financial health. Year-over-year, the net income skyrocketed by 444.88%, suggesting Reddit's strategic ventures and expense management are yielding fruitful results.

The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the last quarter stood at $164M, increasing by 129.57% from the previous quarter. On a yearly basis, EBITDA grew by a staggering 1,419.70%, emphasizing the company's improved operational efficiency.

Despite these positive indicators, Reddit's current Price-to-Earnings (P/E) ratio is 118.78. This high P/E ratio could indicate an overvaluation, leading to a bearish outlook. Additionally, insider selling in recent months might suggest potential concerns or lack of confidence among top executives, adding a negative sentiment to the stock.

Technical Analysis

Reddit’s current stock price is $228.75, which is an increase of 4.69% compared to a month ago, showing a short-term positive trend. On a year-over-year basis, the stock price has risen by 30.81%, further suggesting a long-term upward movement.

However, the technical indicators show a bearish trend. The current Simple Moving Average over 10 days (SMA10) is $248.10, which is lower than the previous SMA10 of $249.63, indicating a potential downward trend in price movement. Moreover, the Relative Strength Index (RSI) is 76.2, suggesting that the stock may be overbought, which can be perceived as a bearish condition.

Alternative Data Analysis

Looking at job postings and employee sentiment, Reddit currently has 81 open positions, an increase of 37% in the last couple of months. This growth in job postings indicates that the company is looking to expand, which typically is a healthy sign.

From a user acquisition perspective, Reddit has about 4.71 billion visitors to their webpage, up by 11% in the last couple of months. This upward trend suggests an increase in customer engagement, contributing to a bullish outlook.

Regarding customer engagement, Reddit also maintains 880,000 followers on Instagram and 1.1 million followers on Twitter. While the Instagram following remained stable, the number of Twitter followers decreased by 1%.

Analyzing AltIndex's AI score, Reddit has an AI score of 48, which is interpreted as a hold signal. This score reflects a mixed sentiment based on fundamental, technical, and alternative data analyses.

Conclusion and Recommendation

Reddit exhibits strong financial performance with a significant increase in revenue, net income, and EBITDA on both quarterly and yearly bases, indicating robust growth and profitability. However, the high P/E ratio and recent insider selling may be viewed as potential red flags. The technical indicators collectively demonstrate a bearish trend, highlighted by the downward movement in SMA10 and high RSI. In alternative data, the rise in job postings and web traffic, paired with AI score, suggest that Reddit is strategically positioned for future growth, though employee sentiment remains neutral.

Based on the collected data, a recommendation for Reddit's stock would be a "Hold." While the company shows promising growth and expansion, the potential overvaluation and bearish technical indicators suggest caution for immediate buying decisions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.