Reddit stock price has crashed in the past few months. RDDT shares have crashed from the all-time high of $230 in February to a low of $107.30, its lowest level since October last year. This crash has brought its market cap from over $41 billion in February to the current $19.1 billion, leading to a $22 billion wipeout.
Reddit stock price has crashed
Reddit, one of the top social media companies, has come under pressure in the past few months as concerns about its growth continue.
The most recent results showed that the revenue in the fourth quarter stood at $427 million, a 71% annual increase.
Its gross margins rose to 92.6%, while the adjusted EBITDA rose to $154 million. This growth happened as the number of daily active unique users jumped by 39% to 101.7 million. This makes it one of the biggest companies in the social media industry.
Reddit’s annual revenue continued to soar in 2024. Its annual figure rose by 62% to $1.3 billion, a big increase from the $228 million that it made in 2020.
Analysts anticipate that the company’s growth will continue growing in the coming years. Its annual revenue is expected to hit $1.81 billion, a 39% increase from what it made in 2024. It will then make over $2.36 billion in 2026.
Reddit’s business is becoming a more profitable company. Analysts anticipate that the earnings per share (EPS) to move from minus $8.19 to an earnings per share to $0.02. For the year, analysts expect that its EPS will be $1.14, followed by $2.29 in the next financial year.
Read more: Reddit stock faces bigger risks than Google algorithm change in 2025, analyst warns
Is Reddit a good stock to buy?
Reddit has been a unique social media company since 2005. It is more unique than other social media companies like X and Facebook in that people use it to access and communicate based on their areas of interest.
Reddit’s business has continued to do well, adding more users each day. SimilarWeb data shows that it is one of the most visited websites in the internet. It had over 3.4 billion visitors last month, a 11% decline from a month earlier. This decline is partly because February had 28 days compared to January’s 31.
A case can be made to invest in Reddit stock. Its monthly active users are still growing, and the company is on a path towards profitability.
Additionally, analysts believe that the Reddit stock price has more upside, with the average target by Wall Street analysts being $204, up from the current $107.2.
Reddit stock price forecast
RDDT stock chart by TradingView
The daily chart shows that the RDDT share price has crashed in the past few weeks. This crash happened after the company issued a weak forward guidance after publishing its financial results.
Reddit stock has moved below the 61.8% Fibonacci Retracement level. It is also nearing the ultimate support of the Murrey Math Lines tool. The Relative Strength Index (RSI) and the MACD indicators have all pointed downwards.
Therefore, the Reddit share price will likely drop some more as jitters in the stock market continue remain. It will then bounce back later this year, and possibly move to the next key resistance level at $150.
Read more: Top 3 reasons why I’m buying Reddit stock on recent weakness
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