Core Insights - Reddit's stock has experienced a significant increase of 20% year to date, despite a drop following its Q4 earnings report, with shares rising more than five times since its March 2024 IPO [1][3] Financial Performance - Reddit's Q4 revenue surged 71% year over year to 394.5 million and other revenue at 4.21 [5] - Adjusted EBITDA soared from 154 million, with earnings per share (EPS) reported at 360 million to 80 million to $90 million, representing 700% to 800% growth [11] - Reddit's user base is approximately 50% international, presenting a significant growth opportunity as it rolls out machine learning translation to enhance user engagement [13] Strategic Initiatives - Reddit is investing in adtech and AI to improve advertising performance, including new ad formats and features like Trends for better audience engagement [6] - A new AI product, Reddit Answers, aims to assist users with various inquiries, enhancing the platform's utility [7] - The company is addressing a recent decline in traffic due to a Google search algorithm change, which has since recovered [9] Valuation - The stock trades at a forward price-to-earnings ratio of 66 times 2025 analyst estimates and an enterprise value-to-EBITDA multiple of 58 times, which is considered reasonable given expected high revenue growth [14]
Reddit Shares Tumble as User Growth Disappoints. Is Now a Golden Opportunity to Buy the Stock?