Reddit’s stock (NYSE: RDDT) has taken shareholders on a rollercoaster ride since its IPO on the NYSE back in March 2024. The stock had climbed 180% in 2024, only to stutter since the start of this year.
Despite these positive developments, Reddit’s stock performance has been volatile. After a remarkable climb in 2024, the stock experienced a significant decline in early 2025, mirroring a broader market correction driven by concerns over tariffs, economic slowdown, and shifting investor sentiment.
This downturn highlights the sensitivity of RDDT to macroeconomic factors and the broader market environment. Moreover, analysts have expressed skepticism about the sustainability of Reddit’s growth, citing its heavy reliance on temporary boosts, such as increased visibility from Google Search and questioning its valuation.
YOUR CAPITAL IS AT RISK
Reddit Share Price Targets
Analysts have set a 12-month price target for Reddit with an average expectation of $146.97, ranging from a high of $225.00 to a low of $75.00.
Our View: You would be wise to consider the views of the analyst community in conjunction with the fundamentals surrounding the company to properly determine a value for the stock that you feel is appropriate.
At the upper end of analysts estimates it would be easy to get carried away with the potential gains on show, but the flipside is that these targets can shift within the blink of an eye and that the view of analysts is very dynamic.
If you are considering swing trading, or day trading Reddit shares that is a separate consideration, but for those planning for the long haul, fundamental analysis is king.
Reddit Inc. – The Basics Driving The Business
Reddit’s core business revolves around providing a platform for user-generated content, organized into thematic communities known as subreddits. This decentralized structure allows for a diverse range of discussions, from niche hobbies and interests to breaking news and political discourse.
The platform’s strength lies in its ability to foster strong communities and facilitate authentic interactions among users. This unique value proposition has attracted a loyal and active user base, making Reddit a valuable source of information and an influential platform for shaping public opinion.
The site derives revenue primarily from advertising, with a smaller contribution from premium subscriptions (Reddit Premium) and, more recently, data licensing agreements. The company’s challenge lies in effectively monetizing its vast user base without alienating its core community or compromising the platform’s unique culture.
The past year has been a period of significant transformation for Reddit. The company has made strides in diversifying its revenue streams and enhancing its advertising capabilities. A key development in this area is the launch of “Community Intelligence” advertising tools, designed to leverage Reddit’s vast archive of user-generated content to provide advertisers with deeper insights into community conversations and trends.
By harnessing the power of AI, Reddit aims to offer more targeted and effective advertising solutions, attracting a wider range of brands and increasing ad revenue. This initiative is particularly important in an era where AI-generated content is becoming increasingly prevalent online, making it more difficult for advertisers to discern genuine user engagement from artificial activity.
Furthermore, Reddit has strategically partnered with major sports leagues, including the NFL, NBA, MLB, PGA Tour, and NASCAR. These collaborations aim to bring exclusive content, such as highlights, behind-the-scenes videos, and interactive segments, to the platform, attracting new users and boosting engagement among existing ones.
By tapping into the passion and enthusiasm of sports fans, Reddit hopes to expand its reach and diversify its content offerings, making the platform more appealing to a broader audience. This move aligns with Reddit’s broader strategy of becoming a more comprehensive and engaging online destination.
