Reddit, Inc. (RDDT): A Bull Case Theory

Core Thesis - Reddit, Inc. is positioned for significant growth in the advertising market, with strong user engagement and high return on ad spend compared to competitors [2][4]. Financial Performance - In Q2, Reddit reported revenues of $500 million, marking a 78% year-over-year increase, with advertising contributing 93% of total revenue [3]. - Advertising revenue specifically rose by 84% to $465 million, while other revenue streams grew by 24% to $35 million [3]. User Engagement and Growth - Daily active user growth is outpacing major competitors, supported by ongoing product innovation [2][4]. - The active advertiser base increased by more than 50% from the previous year, indicating broad-based strength across its advertising business [3]. Advertising Efficiency - Reddit delivers a 66% higher return on ad spend than most paid social platforms, showcasing its efficiency and effectiveness in driving marketing outcomes [4]. - The combination of rapid user growth, high ad ROI, and valuable data assets positions Reddit as a compelling growth platform [4]. Market Position and Future Potential - Despite a smaller overall share of the digital ad market, Reddit's advertising business and data monetization strategies are expected to drive substantial upside [4]. - The stock price has appreciated approximately 20% since previous bullish coverage, reflecting ongoing confidence in Reddit's growth potential [5].