Reddit (NYSE: RDDT) Navigates Strong Q3 Earnings Against Q4 Outlook Concerns

By Danny Green30 Oct, 18:09From Financial Modeling Prep

Key points

Reddit (NYSE: RDDT) reported strong Q3 2026 results with earnings per share of $1.40 and revenue up 53% to $895 million.
Analyst Mark Shmulik set a $120 price target for the stock, implying 32.30% upside from its previous trading price of $90.71.
Concerns arise from the Q4 outlook, with expected revenue of $1 billion to $1.03 billion below analyst consensus of $1.05 billion, and potential declines in daily active users due to reduced Google search traffic.

Reddit (NYSE: RDDT) is the stock of Reddit, a social platform where people join topic-based communities. The company earns most of its revenue from advertising and also has other revenue sources. On October 30, 2026, Bernstein analyst Mark Shmulik set a $120 price target when shares traded at $90.71, implying about 32.30% upside.

Reddit’s third-quarter 2026 results give context for that target. Earnings were $1.40 per share, up 75% from a year earlier and 6.87% above the Zacks Consensus Estimate, as highlighted by Zacks. Revenue rose 53% to $895 million, beating the estimate by 0.96%.

Advertising revenue grew 54% to $847 million as demand, prices and ad impressions increased. Other revenue rose 35% to $48 million. Global daily active uniques—the number of distinct people using Reddit each day—averaged 130.3 million, up 12% from a year earlier.

The fourth-quarter outlook raises a concern for the $120 target. Reddit expects revenue of $1 billion to $1.03 billion, below the $1.05 billion analyst consensus cited by Bloomberg, as highlighted by Invezz. CEO Steve Huffman warns that daily users could fall by a low double-digit percentage from roughly 130 million if traffic from Google search keeps declining.

Shares fell more than 25% at Friday’s open, as highlighted by Invezz. They later traded at $89.97, down $39.63, or 30.58%. BofA Securities and Citizens downgraded the stock, while Guggenheim and Needham maintained Buy ratings. Higher operating costs add to the pressure as Reddit works to turn revenue growth into profit.