• In early February 2026, Reddit reported fourth-quarter 2025 revenue of US$725.61 million and net income of US$251.6 million, issued first-quarter 2026 revenue guidance of US$595 million to US$605 million, authorized a US$1.00 billion open-ended share repurchase program, and filed a US$1.73 billion shelf registration linked to employee stock offerings.
• Separately, advertising automation platform Shirofune announced it had added Reddit Ads to its omnichannel interface, potentially making it easier for marketers to integrate Reddit’s communities into cross-platform campaigns and measure Reddit’s role alongside other major digital ad channels.
• Against this backdrop, we’ll examine how Reddit’s new US$1.00 billion buyback authorization could shape the company’s evolving investment narrative.

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Reddit Investment Narrative Recap

To own Reddit, you have to believe its community driven platform can keep attracting users and advertisers while managing content, regulation, and competition. Near term, the key catalyst is how effectively Reddit converts engagement into higher quality ad spend, while the biggest risk is advertiser sensitivity to user metrics and ad performance. The latest results and ad tech integrations reinforce the core story, but do not remove concerns around user growth transparency and ad market dependence.

The US$1.00 billion open ended buyback stands out here, because it sits alongside a US$1.73 billion employee stock shelf and ongoing stock price volatility. Together with new integrations like Shirofune adding Reddit Ads for automated, cross channel buying, it gives investors more to weigh around capital allocation, dilution from employee equity, and how much future upside depends on sustained advertiser demand.

Yet behind the headlines, the shift in how Reddit plans to report user metrics is something investors should be aware of, especially as...

Reddit's narrative projects $3.8 billion revenue and $1.0 billion earnings by 2028. This requires 31.8% yearly revenue growth and an earnings increase of about $783.7 million from $216.3 million today.

Uncover how Reddit's forecasts yield a $252.39 fair value, a 81% upside to its current price.

Exploring Other Perspectives

Before this news, the most optimistic analysts were banking on Reddit reaching about US$5.0 billion in revenue and US$1.5 billion in earnings by 2028, which assumes much stronger outcomes than the more cautious views and could look either more realistic or more stretched once these new results and ad partnerships are fully reflected in expectations.

Explore 25 other fair value estimates on Reddit - why the stock might be worth over 2x more than the current price!

Build Your Own Reddit Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Reddit research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Reddit research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Reddit's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.