Reddit Inc. (RDDT) is trading at a forward 12-month Price/Sales (P/S) ratio of 9.13X, significantly higher than the Zacks Computer and Technology sector average of 6.62X. Year-to-date, RDDT shares have fallen 26.4%, underperforming the sector’s 10.9% gain. In comparison, competitors like Pinterest, Meta Platforms, and Snap are trading at P/S ratios of 2.8X, 5.78X, and 1.5X, respectively.
In Q1 2026, Reddit reported an advertisement revenue increase of 74% year-over-year, reaching $625 million, driven by a rise in average revenue per user (ARPU), which grew 44% to $5.23. Daily active unique users (DAUq) climbed 17% to 126.8 million, while weekly active unique users (WAUq) rose 23% to 493.1 million. For Q2 2026, Reddit expects revenues between $715 million and $725 million, with consensus estimates at $727.20 million, representing a year-over-year growth of 45.55%.
Despite challenges in the macroeconomic landscape, Reddit’s expanding advertising portfolio and user engagement are key drivers for growth. The company is also focused on product innovation, including AI-powered advertising tools, to enhance user experience and attract advertisers.
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