Is Reddit (RDDT) Now An Opportunity After The Recent Share Price Slide

Simply Wall St.11:26

If you are wondering whether Reddit's share price matches its underlying worth, you are not alone. This article is designed to help you size up what you are really paying for. Reddit last closed at US...

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This article is designed to help you size up what you are really paying for. Reddit last closed at US...</p>\n\n<a href=\"https://simplywall.st/stocks/us/media/nyse-rddt/reddit/news/is-reddit-rddt-now-an-opportunity-after-the-recent-share-pri\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RDTL","symbol_name":"2倍做多RDDT ETF-GraniteShares","start_time":0,"source_url":"https://simplywall.st/stocks/us/media/nyse-rddt/reddit/news/is-reddit-rddt-now-an-opportunity-after-the-recent-share-pri","article_id":"2611910351","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4300003-choice1-main-header/1585186588101"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/media/nyse-rddt/reddit/news/is-reddit-rddt-now-an-opportunity-after-the-recent-share-pri","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2611910351","pubTimestamp":1771212381,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether Reddit's share price matches its underlying worth, you are not alone. This article is designed to help you size up what you are really paying for.\nReddit last closed at US$139.65, with returns of 0.1% over 7 days, a 39.5% decline over 30 days, a 42.3% decline year to date, and a 28.9% decline over the past year, which raises fair questions about how the market currently views its prospects and risks.\nRecent headlines have focused on Reddit as a freshly listed...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"RDTL":"2倍做多RDDT ETF-GraniteShares","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU2290526834.HKD":"BGF NEXT GENERATION TECHNOLOGY \"A2\" (HKDHDG) ACC","BK4077":"互动媒体与服务","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","RDDT":"Reddit","BK4547":"WSB热门概念","LU2360107168.USD":"BGF NEXT GENERATION TECHNOLOGY \"A4\" (USD) INC"},"translate_title":"Reddit(RDDT)在最近股价下滑后现在是一个机会吗","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RDTL":0.6,"RDDT":1.98},"content_text":"If you are wondering whether Reddit's share price matches its underlying worth, you are not alone. This article is designed to help you size up what you are really paying for. Reddit last closed at US$139.65, with returns of 0.1% over 7 days, a 39.5% decline over 30 days, a 42.3% decline year to date, and a 28.9% decline over the past year, which raises fair questions about how the market currently views its prospects and risks. Recent headlines have focused on Reddit as a freshly listed social media and community platform, including ongoing interest in how it can turn its large user base and data into sustainable revenue streams. This media attention provides important context for the recent share price swings, because sentiment around growth, monetisation, and user engagement can quickly influence what investors are willing to pay. Right now Reddit scores 2 out of 6 on our valuation checks. This means it screens as undervalued on two of the six metrics in its valuation score. Next we will walk through the key valuation approaches behind that result, before finishing with a way to think about value that goes beyond the usual models.  Reddit scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown. AdvertisementApproach 1: Reddit Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today using a required rate of return, to arrive at an estimate of what the entire business might be worth right now. For Reddit, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in US$. The latest twelve month free cash flow is about $679.3 million. Analysts provide free cash flow estimates for several years, and Simply Wall St extrapolates these further out, with the projection reaching $3.25b in 2030. The ten year path between 2026 and 2035 is built from a mix of analyst sources and estimated growth rates, and each of those future cash flows is discounted back to today. Putting all of that together, the DCF model arrives at an estimated intrinsic value of $364.04 per share, compared with the recent share price of $139.65. On this basis, the stock screens as 61.6% undervalued using this method. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Reddit is undervalued by 61.6%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks. RDDT Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Reddit. Approach 2: Reddit Price vs Earnings For a profitable company, the P/E ratio is a useful shorthand for what investors are paying today for each dollar of earnings. It helps you compare companies that already generate profits, rather than focusing only on revenue or assets. What counts as a “normal” P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually point to a lower one. Reddit currently trades on a P/E of 50.36x. That is well above the Interactive Media and Services industry average of 11.22x, and also above the average of its peer group at 47.17x. To go a step further, Simply Wall St calculates a proprietary “Fair Ratio” for Reddit of 34.71x, which reflects factors such as its earnings growth profile, profit margins, industry, market capitalization and company specific risks. This Fair Ratio can be more useful than a simple peer or industry comparison, because it aims to adjust for differences in growth, risk and profitability rather than assuming all companies deserve similar multiples. Comparing Reddit’s current 50.36x P/E with the Fair Ratio of 34.71x suggests the shares trade above what this framework would consider a fair level. Result: OVERVALUED NYSE:RDDT P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies. Upgrade Your Decision Making: Choose your Reddit Narrative Earlier we mentioned that there is an even better way to understand valuation. Narratives let you attach a clear story to your numbers by spelling out how you see Reddit’s future revenue, earnings and margins. You can then link that story to a forecast and to a Fair Value that you can compare with the current price on Simply Wall St’s Community page, where millions of investors share different views. For example, some users suggest a lower fair value of about US$38 that leans on slower growth and higher risk, while others suggest higher fair values around US$252 and US$325 that lean on faster revenue growth and stronger margins. These Narratives update automatically when new information such as news, earnings or analyst targets is added, so you can quickly see whether your own Narrative still supports buying, holding or selling. For Reddit, however, we will make it really easy for you with previews of two leading Reddit Narratives: Both were written by real investors using the same building blocks you have just seen. They simply plug in different assumptions about growth, margins and risk. Looking at them side by side can help you sanity check where your own view sits. 🐂 Reddit Bull Case Fair Value in this bullish narrative: about US$151.40 per share Implied pricing gap: Reddit trades at roughly 7.8% below this Fair Value based on the latest close of US$139.65 Revenue growth assumption: about 30.7% a year  Sees regulatory and content moderation costs as a real headwind but assumes Reddit can still grow into higher margins over time. Leans on stronger revenue growth, improving profitability and a sizeable opportunity in both advertising and data licensing to support that higher Fair Value. Assumes the market will still be willing to pay a premium P/E multiple for Reddit over time, even with a slightly higher discount rate applied to future earnings.  🐻 Reddit Bear Case Fair Value in this more cautious narrative: about US$38.00 per share Implied pricing gap: Reddit trades at roughly 267.5% above this Fair Value based on the latest close of US$139.65 Revenue growth assumption: about 21.0% a year  Focuses on Reddit’s heavy reliance on advertising to a narrow user group, with low current monetisation and an ad platform that the author sees as still underdeveloped. Builds in meaningful dilution from stock based pay, a powerful CEO voting position and uncertainty around newer revenue streams such as data licensing and the user economy. Arrives at a lower Fair Value by pairing more moderate revenue growth, a lower profit margin path and a less generous future P/E multiple with ongoing competitive and regulatory risks.  These are just two of several Narratives on Reddit, and you do not have to agree with either one. The useful part is seeing how different investors connect specific assumptions about users, ads, data licensing, costs and governance to a concrete Fair Value range. Once you have a sense of which story feels closer to what you believe is realistic, you can adjust the inputs, build your own Narrative, and decide whether Reddit’s current price looks rich, reasonable or appealing for your portfolio and time horizon. Curious how numbers become stories that shape markets? Explore Community Narratives Do you think there's more to the story for Reddit? Head over to our Community to see what others are saying! NYSE:RDDT 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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