Reddit Inc (RDDT) stock analysis
Reddit Inc (RDDT) clears 3 of this site's 8 mechanical value filters, 3 of 8 Buffett-style checks and 4 of 5 Lynch-style checks. At $150.26 it trades 66.2% above this site's neutral DCF value (a margin of safety of -66.2%). Its earnings quality rates Weak and it returns −1.2% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Reddit do?
Reddit runs a social platform made of thousands of topic communities, and earns most of its money from advertising and data licensing.
What stands out about Reddit?
- The share price implies 21.0% yearly growth. At $150.26, RDDT's free cash flow of $5.29 per share would have to grow 21.0% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 3 of the 8 value filters. It fails Trailing P/E < 25 (33.19), Price/Book < 8 (8.80) and Price/Sales < 7 (10.40); the other 3 pass and 2 were not evaluated. See every filter.
- Strongest against peers: revenue growth. At 66.6% (peer median 10.8%) it ranks 1st of 13 among media stocks this site tracks. See the ranking.
- Earnings quality: Weak · 2 flags, 1 watch. Beneish M-score −2.20 (grey zone), mostly from very fast sales growth · accruals −5.8% of assets · stock comp 15.6% of revenue · share count +84.9% a year. From the latest 10-K (year to Dec 2025). See the Earnings Quality Screener.
- Short interest is elevated. 15.2% of the float is sold short, 4.3 days to cover, above this site's 5% flag. See the figures.
How has Reddit's share price moved?
The interactive price chart needs JavaScript.
Is Reddit undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -66.2%
- Wall St. analyst rating Buy · 3.88/5 40 analysts this month: 10 strong buy, 16 buy, 13 hold, 1 sell, 0 strong sell (Finnhub). Down from 3.89 last month.
- Altman Z″-Score (bankruptcy risk) 15.96 · Safe zone
- Earnings quality (is the profit real?) Weak · 2 flags, 1 watch Beneish M-score −2.20 (grey zone), mostly from very fast sales growth · accruals −5.8% of assets · stock comp 15.6% of revenue · share count +84.9% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) −1.2% net Latest fiscal year (2025): dividends 0.0% + buybacks 0.0% − stock comp 1.2%, as a share of today's market cap. Stock comp outruns what comes back in cash. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) n/a (too few years of filings)
- PEG (growth at a reasonable price) 0.14 · Well under fair P/E 33.2× ÷ 245% a year of growth behind it. 10th lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 1 of 4 · misses capital-light (n/a), real profit, cash back Capital-light growth: cannot be measured (too few years of filings); Profit is real: not cleared (2 earnings-quality flags); Cash to owners: not cleared (−1.4% a year net); Fair price (PEG): cleared. See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 2 flags
- Standing vs. sector peers 4 of 6 measures above the median Compared with the 12 other media stocks this site tracks: 3 in the top third, 1 in the bottom third.
How does Reddit compare with its peers?
4 of 6 measures sit above the median of the 12 other media stocks tracked here, 3 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 26.1× 33.2× ✕8th of 11
- Free-cash-flow yieldhigher is cheaper · peer median 4.8% 3.5% –9th of 13
- Return on equityhigher is better · peer median 15% 29% –6th of 13
- Net marginhigher is better · peer median 8.7% 31.4% ✓2nd of 13
- Revenue growthhigher is better, year on year · peer median 10.8% 66.6% ✓1st of 13
- Debt / equitylower is safer · peer median 0.57 0.00 ✓1st of 13
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and RDDT doesn't clear enough of it yet. In its favor: RDDT is currently earning a strong return on shareholders' equity, carries a conservative amount of debt relative to equity, and converts sales into profit at healthy margins. Where it comes up short: RDDT and its five-year average return on equity falls short too, so this isn't just a one-off dip, hasn't grown earnings per share fast enough over five years to impress him, doesn't cover its interest expense as comfortably as he'd want, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✕
- Debt/Equity < 0.5 ✓
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
Lynch looked for growth stories that weren't overpriced for that growth, and RDDT falls short of his bar. In its favor: RDDT clears an even tighter PEG-under-1 bar he'd want for a stock growing this fast, isn't leaning on debt to fund that growth, isn't asking too much even by a fast grower's usual richer multiple, and is generating real cash to back up a fast grower's higher price tag. Where it comes up short: RDDT is growing earnings outside the 20-50% band he considered sustainable for a fast grower - either not fast enough to earn the label, or a pace he'd flag as unlikely to hold up.
- PEG < 1 (stricter for fast growers) ✓
- EPS growth 20%-50% ✕
- Debt/Equity < 0.5 ✓
- P/E < 40 ✓
- Price/FCF < 40 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Reddit pass?
- Market Cap > $25B $28.9B
- Trailing P/E < 25 33.19
- PEG Ratio < 1.5 0.14
- Price/Book < 8 8.80
- Price/Sales < 7 10.40
- EPS Growth YoY > -5% +179.6%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Reddit's margin of safety?
History tracking starts this week - check back in a future week to see how this has moved.
Where is Reddit in its 52-week range?
What is the short interest in Reddit?
22,110,869 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Reddit? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case +2%
- Short interest under 5% of float 15.2%
- Passes most of the 6 fundamental filters 3/6 passed
- Price run-up backed by value, not just momentum +22% off 52wk low
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Reddit shareholders gained per year?
Not enough clean earnings history to compute this for RDDT yet - a loss year in the window breaks the growth math rather than faking a number through it.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from RDDT's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Reddit's 10-year financials show?
From RDDT's own 10-K filings (SEC EDGAR): up to the last 4 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Reddit
What kind of company is Reddit?
Reddit runs a social platform made of thousands of topic communities, and earns most of its money from advertising and data licensing. This site groups it with Media stocks.
Is Reddit trading above or below its DCF value?
At $150.26, RDDT trades 66.2% above this site's neutral DCF value of $90.41 per share, a margin of safety of −66.2%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Reddit pass?
RDDT passes 3 of 8. It passes Market Cap > $25B ($28.9B), PEG Ratio < 1.5 (0.14) and EPS Growth YoY > -5% (+179.6%). It misses Trailing P/E < 25 (33.19), Price/Book < 8 (8.80) and Price/Sales < 7 (10.40). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
Are Reddit's reported earnings reliable?
This site's earnings-quality check rates RDDT Weak · 2 flags, 1 watch. Beneish M-score −2.20 (grey zone), mostly from very fast sales growth · accruals −5.8% of assets · stock comp 15.6% of revenue · share count +84.9% a year. From the latest 10-K (year to Dec 2025). Concerns: the Beneish M-score (on watch), stock-based compensation (flagged) and share dilution (flagged). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
When does Reddit report earnings next?
Reddit's next earnings report is expected on October 29, 2026 after the market closes, with analysts expecting earnings of $1.37 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 4 times, by an average of +45.9%.
How heavily is Reddit stock sold short?
As of September 30, 2026, 15.2% of RDDT's float was sold short (22,110,869 shares, 4.3 days to cover), up 11.4% from the prior reporting period. FINRA publishes short interest twice a month, so it changes about every two weeks; this site flags anything above 5% of the float.
Where do these numbers come from?
- Financial statements: Reddit's 10-K annual report for the year ended Dec 31, 2025, filed Feb 6, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Reddit Inc analysis
This page shows every value-investing check the site runs on Reddit Inc (RDDT) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.