Key Takeaways
Reddit Inc. (NYSE: RDDT) is set to report first-quarter results on Thursday, a critical moment for the company after its stock has fallen 36% in 2026 despite soaring 326% from its 2024 IPO price.
"We believe that Reddit remains incredibly under-monetized relative to peers and has positioned itself as a human-first social platform that will continue to attract more users and advertisers as it scales,” D.A. Davidson analyst Wyatt Swanson said in an April 21 note.
Analysts expect the social media platform to report adjusted earnings of 57 cents per share on revenue of $608 million, according to FactSet consensus. The key metric for investors will be advertising revenue, which is projected to jump 58% from the prior year to $567 million.
The stock’s performance has created a sharp divide between bulls and bears. Bulls point to strong advertising trends and the company’s unique position as a platform for human-led discussion. However, bears are concerned about slowing user growth—expected to decelerate to 16% from 30.7% a year earlier—and rising competition from AI chatbots for answering user questions.
The central tension in Reddit's upcoming report is the divergence between its user growth and advertising monetization. While daily active user growth is slowing, the company is rapidly increasing its advertising revenue through new products and better monetization of its existing user base. Jefferies analyst John Colantuoni, who rates the stock a Buy with a $250 price target, noted "particularly strong trends at RDDT" in recent conversations with advertisers.
The performance of other consumer internet companies offers a mixed outlook. While Booking Holdings and Coursera both met revenue expectations, Coursera’s stock fell 11.6% after its report. Meanwhile, strong results from Alphabet pushed its stock higher, while Meta Platforms fell despite a strong quarter due to higher spending guidance.
The results on Thursday will show if Reddit's aggressive monetization strategy can convince investors to look past slowing user metrics and a challenging competitive landscape. The company's own guidance for the quarter was for revenue between $595 million and $605 million.
This article is for informational purposes only and does not constitute investment advice.
