Remember when Reddit was just that place where you’d fall down rabbit holes at 2 AM, reading conspiracy theories about why hot dogs come in packs of 10 but buns come in packs of 8? Well, plot twist: that same platform is now making Wall Street analysts lose their minds in the best possible way.
Reddit (RDDT) went public in March 2024 at $34 per share, and since then? It’s been on a rocket ship that would make Elon Musk jealous. We’re talking a 567% gain to around $227 per share. That’s not a typo – five hundred and sixty-seven percent. Your calculator didn’t break.
The latest catalyst? Their Q2 earnings dropped on July 31st, and it was basically the financial equivalent of finding a $20 bill in your old jeans. Revenue jumped 78% to $500 million, absolutely crushing estimates of $426 million. That’s like expecting a decent pizza and getting a five-course meal instead.
The Numbers That Made Analysts Swoon
Here’s where it gets spicy: Reddit went from losing $10 million in Q2 2024 to making $89 million in Q2 2025. That’s what we call a glow-up. They’re also sporting a 90.8% gross margin, which means they’re keeping about 91 cents of every dollar after expenses. In finance terms, that’s absolutely bonkers good.
Daily active users hit 110.4 million (up 21%), proving that people really can’t quit their doom-scrolling habits. And honestly? Good for Reddit’s bottom line.
Wall Street Goes Full Reddit Mode
Thirteen different analysts decided to boost their price targets after these earnings. Truist bumped theirs up by $65, Morgan Stanley by $60, and B. Riley went full YOLO with a $235 target. It’s like watching your favorite underdog suddenly become the cool kid everyone wants to sit with at lunch.
But Here’s the Plot Twist
The stock is now trading at 98 times earnings and 120 times forward earnings. To put that in perspective, that’s like paying $120 for a sandwich because you think it might taste really, really good next year. Reddit CEO Steve Huffman says they’re “built for this moment,” and while that sounds great, those valuations are making even the most optimistic investors do a double-take.
The Reality Check
Look, Reddit is genuinely crushing it. In a world where authentic human connection is rarer than a parking spot in Manhattan, they’ve figured out how to monetize our collective need to argue about whether pineapple belongs on pizza (it doesn’t, fight me).
But after a 336% run in the past year, this stock is hotter than a fresh meme on r/wallstreetbets. It’s a great long-term play, but maybe wait for the hype to cool down before jumping in. Sometimes the best move is watching from the sidelines while everyone else loses their minds.
After all, the internet taught us one thing: what goes viral can also go viral in reverse.