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Vlad Bastion

Founder of Investment Bastion, Systematic Stock Ratings & Algorithmic Portfolios

22 Jun, 12:26Latest

Reddit may be the most obvious recovery bet on the board because the fear that AI search shrinks its users is overdone. Revenue grew 70% last quarter and is projected to rise about 35% a year through 2028, from $2.2B to $5.4B, with a 35% free-cash-flow margin. Yet the stock is down 25% this year at 14x 2028 earnings, below the S&P 500. The worry is real: about 75M of its 127M daily users are logged out, many arriving from Google or AI search for a quick read, and logged-in US users grew only 1%. x.com x.com

RDDT

4 May, 16:24

Reddit's upside depends on monetizing the AI companies that feed on its data, while its valuation already prices in slowing ad growth. It IPO'd at 90x EBITDA but trades at 12x 2028E EBITDA despite a 34% revenue CAGR because, as the Financial Times observed, users arrive via Google and leave within seconds, and AI summaries now answer without sending traffic. If lawsuits force Anthropic and Perplexity to pay licensing fees, revenue could rise by up to $1 billion a year, multiplying the stock. x.com

RDDT

Audit The Herd

CPA, Corporate Finance Professional

30 Oct

RDDT

Reddit's reliance on fragile, low-intent search traffic makes the login pivot probably the right long-term move. Over 80% of monetization comes from logged-in and app users, and login controls help block scraping. Near-term DAU growth will face pressure, though ARPU could rise; conversion to returning users still needs testing. Even if growth slows to 30% with decent margins, the stock remains undervalued and a good buy here. x.com x.com x.com x.com x.com

Mindset for Money

CPA, Financial Analyst, Former Big Four Auditor

30 Oct

RDDT

Reddit's user slowdown may matter less to revenue than the selloff implies because the weakness is among logged-out users, who generate only 20% of revenue. Logged-in users kept growing when logged-out users declined in 2022; requiring sign-ins could help, though the latest report was bad and the new-user funnel remains a risk. Reddit already monetizes better than Pinterest and has more cash to promote app logins. x.com x.com

Brad Freeman

Equity Researcher, Creator of Stock Market Nerd

29 Oct

RDDT

Reddit's worsening US user growth threatens its revenue runway despite elite ARPU growth, revenue growth and margin expansion. US daily users fell 2% year over year and missed estimates by 7%; the Q4 guide was weak. It needs healthier user growth in its most important market to dispel Google/AI discovery fears. Forward indicators do not look promising, and the trend of positive estimate revisions will end. x.com x.com

Q-Cap

Financial Satire & Grift Detection

30 Oct

RDDT

Reddit's projected free cash flow makes the selloff look overdone: its $15.6B enterprise value is 8.8 times expected $1.78B next-year FCF, an 11.4% yield. US user growth remains a problem, but an Anthropic settlement or OpenAI or Google deal could add upside; high short interest could amplify a turnaround. Reddit intends to restrict logged-out access, which would block Google's scraping. x.com x.com

Michael Wiggins De Oliveira

Deep Value Returns, Equity Investing without Options or Leverage

30 Oct

RDDT

Reddit's 13x next-year free-cash-flow multiple looks too low against expected revenue growth above 30% in 2027. Q4 growth is expected above 40% despite a 70% year-ago comparison; even a business growing at 25% can trade around 20-25x forward free cash flow. AI uncertainty may weigh on sentiment, and the timing of a rerating is unclear, but Reddit deserves a considerably higher valuation; $315 remains the target, while $100 looks even less plausible. x.com x.com x.com x.com

Sergey

Growth Investor, Author of Compounding Your Wealth

30 Oct

RDDT

Reddit's weakening user growth threatens the durability of its strong advertising monetization. U.S. daily users declined 1.9% year over year, while Google's AI Search is reducing referrals; Reddit management warned Q4 daily users could fall by a low-double-digit percentage sequentially if current trends continue. Below-consensus Q4 revenue guidance adds risk. x.com

Finance Jack

Equity Research

30 Oct

RDDT

Reddit's cash-adjusted 16x trailing earnings makes selling hard to justify despite a bad quarter that lowered future earnings expectations. It should still grow 20%+ over the coming years, has no debt, and could have significant upside if it executes its business-model change. For now it remains a hold, not a position to add to. x.com

muji

Hypergrowth Investor, Author of HHHYPERGROWTH, SaaS Research

1 Aug

RDDT

The market is wrong to punish Reddit over Q2 US daily-user softness and choppy search referrals, because ad revenue growth of 64% is the better gauge of execution. US daily uniques fell 300,000 sequentially, but weekly uniques rose 700,000, and Q2 is seasonally weak; such pullbacks have happened six times in six years, half in Q2. Ad growth reflects higher engagement and better pricing. User counts show only visit frequency, not engagement or ad impressions, so revenue and ARPU matter most. … Show more

Feroce Research

Thematic Research, Technical/Macro/Fundamental Analysis & Quantitative Positioning

30 Oct

RDDT

Reddit's management has nearly lost confidence, leaving little reason for optimism in a selective market. Its earnings call may have been among the year's worst, and it probably has a long way to go before returning near its highs. x.com

Jonah Lupton

CEO & CIO of FirstWave Capital, Long-Biased Growth

9 Oct

RDDT

Reddit still looks undervalued as Needham's Q3 traffic tracker shows app downloads up 19% and web visitors up 2-3% quarter over quarter, adding to strong alternative data behind an expected Q3 beat and raise. Shares trade at 18x next-twelve-month EPS while revenue is growing 60-65% and EPS 65-70% year over year; new Anthropic, OpenAI or Gemini licensing deals remain possible over the next couple of months, not secured. x.com

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