Reddit Faces User Growth Concerns Despite Strong Financial Performance
DA Davidson has lowered its price target for Reddit (RDDT) from $200 to $185 due to concerns over near-term user growth, citing data showing pressure on global daily active users. The firm maintains a Buy rating but notes that weaker traffic trends could impact future revenue estimates. Despite these concerns, Reddit's Q2 2026 financial results were strong: daily active uniques rose by 18% year-over-year to 130.3 million, and the company reported $805 million in revenue with net income of $253 million—up from $89 million a year earlier. This marks eight consecutive quarters of over 60% annualized revenue growth. However, Reddit's stock has underperformed this year, down more than 30%, while hedge fund interest and short interest remain elevated. Analysts are still largely positive on the stock, with 66% recommending a Buy rating.
Tickers: $RDDT
Topics: DA Davidson profitability Reddit revenue user growth