Core Viewpoint - Reddit Inc. has experienced a significant stock decline of 36% since its fourth-quarter earnings report, despite beating earnings and revenue expectations, primarily due to disappointing user growth attributed to changes in Google's search algorithm [1][2]. Financial Performance - Reddit reported a year-over-year revenue growth of 71% in Q4, marking the fastest growth since 2022 [6]. - The stock is currently trading at 210, indicating a 73% upside potential from current levels [6]. - Analysts view the recent sell-off as excessive, highlighting Reddit's strong fundamentals and growth potential [6]. Growth Drivers - Analysts expect Reddit's advertising expansion to drive future growth, with higher average revenue per user (ARPU) anticipated from enhanced ad tools and broader placements [7]. - Auction-based pricing is projected to attract more advertisers, contributing to revenue growth of 36% and an 87% increase in EBITDA this year [8].
Down over 30% in a month, this tech stock is ‘extremely attractive' now