Key insights
- Needham reiterated a buy rating and $300 price target for Reddit (RDDT), citing accelerating traffic and app download growth in Q3 2026. The firm's analysis indicates stronger user growth compared to Q2 2026, aligning with Reddit's robust revenue and gross profit margins. This positive outlook on traffic metrics, coupled with broader digital advertising strength, supports the bullish stance on RDDT. Other analysts also maintain buy ratings, though some note near-term user growth concerns.
Investing.com - Needham reiterated a buy rating and $300 price target on Reddit Inc (NYSE:RDDT) based on accelerating traffic metrics in the third quarter of 2026. The target suggests significant upside from the current price of $156.47, and InvestingPro data indicates the stock is undervalued with a Fair Value of $198.57.
The firm’s third-quarter 2026 traffic tracker shows Reddit’s app downloads and web traffic both accelerated compared to the second quarter of 2026. App downloads grew 19% quarter-over-quarter in the third quarter of 2026. The growth aligns with Reddit’s impressive 66.59% revenue growth over the last twelve months, supported by exceptional gross profit margins of 91.44%.
Web traffic visitors increased 2% to 3% quarter-over-quarter in the third quarter of 2026. The data suggests Reddit’s users grew faster in the third quarter of 2026 than in the second quarter of 2026.
U.S. user growth was strongest in June during the second quarter of 2026, with strength continuing into the third quarter of 2026. International users have been trending upward since April, with the strength continuing into the third quarter of 2026.
Needham raised its estimates for Reddit and maintained its buy rating and price target.
In other recent news, Deutsche Bank reported that digital advertising spending has been stronger than anticipated through the third quarter and is expected to continue this trend into the fourth quarter. Evercore’s survey of advertising agency executives highlighted that Meta Platforms and Alphabet are leading in digital ad spending, with positive revenue trends noted for both companies. Additionally, Amazon, Netflix, and Reddit received favorable assessments regarding their digital advertising performance.
On the analyst front, DA Davidson adjusted its price target for Reddit shares from $200 to $185, citing concerns about near-term user growth but maintaining a Buy rating. Meanwhile, Guggenheim reiterated its Buy rating for Reddit, with a price target of $255, focusing on advertising growth prospects beyond 2026 despite current search referral challenges. BMO Capital Markets identified Meta Platforms and TikTok as facing significant regulatory risks due to global age verification initiatives, which are still in the early stages. These developments offer insights into the current dynamics in the digital advertising and social media sectors.
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