Out Fox The $treet

Reddit, Inc. has retraced its gains as initial AI and user growth enthusiasm faded. The social media company has more normalized growth, with logged-in users only growing 7% YoY in Q1'26 and key U.S. users reporting sub-10% growth. RDDT's ability to capture a larger share of the AI opportunity is a key forward driver, but the company isn't expected to see any material increase in data licensing fees. The stock is increasingly becoming more attractive at 20x forward EPS targets with more normalized earnings. Reddit, Inc.  ( RDDT ) made a complete roundtrip the last year as the original excitement over AI and user growth collapsed. The stock is no longer expensive, with the valuation more reasonable now and potentially very  attractive with the social media company grabbing a larger share of the AI pie. My  investment thesis  is turning more Bullish on Reddit. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer...

Update - March 10, 2025 Reddit ended down 20% and over 50% from the highs.  The stock needs to close the gap to $80, before Reddit gets appealing.  Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » Original article posted on Feb. 3 Reddit's current growth rate is unsustainable with U.S. DAU growth decelerating and future growth likely to be challenging, similar to other social media stocks. The stock trades at over 20x forward sales, a multiple other social media stocks were unable to sustain. Investors should be cautious; while Reddit may report strong Q4 results, sustaining growth to justify its current stock price is uncertain. The stock market has an established history of smacking down social media stocks when the major growth phase ends.  Reddit, Inc.  ( NYSE: RDDT ) will ultimately face this outcome when the current spectacular growth phase normalizes. My...