Author argues Reddit (RDDT) is undervalued after a large price drop despite strong EPS growth, citing institutional interest and AI-driven ad targeting as catalysts, while noting translation-related growth hurdles.
RDDT — LONG The author argues Reddit's EPS soared 244% from $0.36 in Q4 2024 to $1.24 in Q4 2025 while the stock fell from $214 to $140, compressing its run-rate PER from 148 to 28 and making it cheap versus slow-growth small/mid-cap tech peers. Enhanced AI in Reddit's ad system enables sophisticated hyper-local targeting already rolling out in select regions, which the author expects to be a significant catalyst for future ad revenue growth. Reported interest from Korea's National Pension Service as a buyer near its original purchase price adds institutional support. Main stated risk: native translation tool performance issues are hindering user growth in non-English markets, and heavy options/leverage volume could cause further volatility.
The enhanced Al performance of Reddit's advertising system now allows for highly sophisticated targeting. As a result, hyper-local advertisements are already being rolled out in select regions. This technological advancement is expected to serve as a significant catalyst for future ad revenue growth.
This Reddit post, published February 08, 2026, features u/MasterpieceOk8986 discussing RDDT. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: u/MasterpieceOk8986 · Tickers: RDDT