Should You Wait Before Buying Reddit Stock? Trefis Team Fri, November 13, 2026 at 1:21 PM EST 3 min read RDDT -0.19% ^GSPC -0.56% META +2.83% GOOG -0.96% PINS -0.34% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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Reddit (RDDT) stock has lost 52.2% over the past twelve months, while the S&P 500 returned 12.2%. The shares now sit 61.6% below their January 2026 high, and on the October 29 call management warned that the number of people using Reddit each day could fall in the final quarter of 2026. Is $99.55 a low enough price to buy before Reddit shows whether it actually loses users?
Reddit Costs Less Than The S&P 500 On Earnings
Reddit trades at 19.3 times its earnings over the last twelve months, against 21.9 for the S&P 500. On sales the multiple has fallen sharply: buyers paid 22.7 times sales at the end of September 2025, and they pay 6.2 times today, still above the 3.2 for the S&P 500. That cheaper price comes with better margins, not worse ones. Reddit's operating margin over the twelve months to September 2026 was 29.4%, its highest at any of the 21 quarter ends since September 2021.
Profit is taxed lightly for now, with a tax rate of about 2% in the third quarter. That low rate lifts reported profit, so the earnings multiple would be higher at a normal tax rate. On cash, Reddit trades at 15.9 times operating cash flow, about level with 15.4 for the S&P 500, so on both measures Reddit is priced close to the market or below it.
The business kept growing, too: revenue rose 53% in the third quarter. Management's caution on the call was about users. Management said search referral traffic fell meaningfully in the quarter, with the decline speeding up late, and that Google is not sending people to Reddit the way it used to.
What Must Reddit Deliver In Its Fourth Quarter?
Reddit has guided fourth-quarter revenue of $1.0 billion to $1.03 billion, or 38% to 42% above a year earlier. The consensus for that quarter is $1.05 billion. With that figure sitting about $20 million above the top of the guide, the price appears to assume another beat. That sets a high bar for a company whose growth slowed in each quarter of 2026, dropping from 69.1% in the first to 53.0% in the third.
Management also warned about users. Search traffic dropped by more than 1 million referrals a week on average in October. If that pace continues, management said, daily users could fall in the fourth quarter by a low double-digit percentage from 130 million. Reddit will also begin testing a logged-in-only version in select markets outside the U.S. in the same quarter, which management said will likely trade reach for engagement.
How Has Reddit Stock Moved After Earnings Reports?
Reddit is expected to report in February 2027, releasing results for the fourth quarter of 2026. This is the quarter both the revenue guide and the user warning cover. After its last six reports, the shares fell three times and rose three times over the next two trading days. Those moves ranged from a 29.8% drop after the October 2026 report to a 25.6% gain after the July 2025 one.
Owning the stock through a market sell-off has been costly. In the 2025 tariff shock, Reddit fell 54% from peak to low, against 19% for the S&P 500.
Reddit trades below the market's earnings multiple on a tax rate of about 2%, and analysts still expect revenue above the guide. Fourth-quarter revenue above the $1.05 billion consensus, with daily users down less than management warned, would make now too late; revenue below the bottom of the guide would make now too early.
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