Author presents a bullish Reddit thesis after Q4 earnings, citing 70% revenue growth, 60% incremental net margins, a $1bn buyback, and 22-25x forward 2026 P/E.
RDDT — LONG Author argues Reddit is deeply undervalued after Q4 revenue grew 70% YoY, DAUs rose 4.7% QoQ, ARPU grew 42% YoY, and incremental net income margin reached 60%. They expect 50%+ 2026 revenue growth, supported by Q1 guidance of $595-605m revenue and $210-220m EBITDA plus a newly approved $1bn buyback. At $24bn net cash market cap, the author calculates Reddit trades at 22-25x forward 2026 earnings in the base case and 33x in a nuclear case of 30% revenue growth and 30% incremental margins. Main stated risk is slower US growth as Reddit already reaches 15% of the US population versus 0.9% globally.
assuming revenues grow at 50% in 2026 and incremental NI margins stays in 40-50%, Reddit is currently trading at 22-25x forward 2026 earnings. For a company growing 50+% per year, and with such a clear path for future growth (see by deep dive on the stock) this is an extremely cheap price.
This Reddit post, published February 07, 2026, features u/ajkomajko discussing RDDT. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: u/ajkomajko · Tickers: RDDT