Reddit stock trades 37% lower YTD but analysts see 58% upside on ad growth and AI innovation.

Reddit's stock has fallen nearly 37% year-to-date, dropping from $229.87 to about $145, despite strong revenue growth and profitability. The company reported a 70% revenue increase to $725.61 million and $251.6 million net income in Q4 2025, but missed EPS estimates and gave cautious Q1 2026 guidance, which pressured the stock. Analysts remain optimistic, citing Reddit's expanding AI-powered ad products, international user growth, and data licensing deals as drivers for future earnings growth. With a forward P/E of 33 and a $1 billion share buyback authorized, Reddit is seen as undervalued with a potential 58% upside if advertising demand holds and international monetization improves.