Feb. 6 at 8:25 PM
Reddit shares fell despite posting stronger-than-expected fourth-quarter results, as Wall Street debated the company’s growth outlook. Revenue and average daily users beat estimates, and management issued an upbeat revenue forecast, but the stock pulled back after some analysts lowered price targets.
User growth remains a key focus. Average daily users rose 19% to 121.4 million, slowing from 39% growth a year earlier. While some analysts prefer to wait for clearer signs of sustained user momentum, others are optimistic, citing improvements to the platform through AI integration, personalization, and better onboarding.
Valuations across social media have compressed sharply. Reddit now trades at a much lower forward earnings multiple than last year, in line with peers such as Pinterest and Meta, reflecting a more cautious market view despite solid fundamentals.
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