Reddit Stock Sinks as Weak Outlook Overshadows 53% Revenue Jump

Evercore ISI downgraded Reddit (RDDT) to In Line, lowering its price target to $120 from $265 due to user growth concerns. Reddit reported Q3 revenue of $895M, up 53% YoY, with EBITDA at $402M. U.S. daily active users declined 2% YoY, and management warned of potential global user declines. Several analysts adjusted price targets following the results.

Reddit (RDDT) shares fell 29% on Friday, closing at $91.73 and hitting a 52-week low of $89.28. The drop followed Q3 results that exceeded expectations but were accompanied by weak Q4 guidance.

Reddit's shares fell 29.22% to $91.73 after reporting Q3 2026 results and forecasting Q4 revenue of $1,000M-$1,030M. The company warned of a potential low-double-digit decline in daily active users due to reduced search referral traffic. Q3 revenue rose 53% YoY to $895M, with net income at $283M. Reddit repurchased 670K shares in Q3.

Reddit's stock fell 25% after its Q3 report, with revenue up 53% but daily U.S. users down 2%. B. Riley cut its price target to $190 (95% upside) but maintained a Buy rating, citing earnings and a lower multiple. Analysts' consensus target is $213, with concerns over user growth and guidance.

Evercore ISI downgraded Reddit to In Line from Outperform, cutting its price target to $120 from $265. The firm cited concerns over declining user traffic due to AI search summaries, despite Q3 earnings and revenue beating estimates. Reddit shares fell 29% post-earnings, with Q4 revenue guidance below expectations. The company reported a 2% YoY drop in U.S. daily active users and warned of potential low-double-digit declines globally in Q4.

Reddit's stock dropped 30% after weak Q4 guidance and a test of requiring logins to view content. The company missed revenue expectations, raising concerns about its growth strategy. Reddit's shift risks alienating users and communities, while investors question its monetization plans. The stock is at its lowest since its March 2024 IPO.