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...

Updated - April 1, 2026 Snap was insanely cheap at $4. Not sold on selling off the Specs biz, but think an activist can push management to do more, such as hike subscription prices. Irenic appears more focused on taking $500M in savings from Specs and repurchasing cheap shares.  -Irenic, which has an economic interest of ~2.5% in Snap's Class A shares, wants the company to spin off or shutter its smart glasses business, Specs, according to a Bloomberg report on Tuesday, which cited a letter Irenic sent to Snap Chief Executive Officer and co-founder Evan Spiegel. The activist believes that moves Snap could make could boost its shares to more than $26 each. -The activist fund also wants Snap (SNAP) to rationalize its cost structure by cutting jobs and changing its compensation structure for employees, according to the report. Irenic also is pushing Snap to concentrate on adopting artificial intelligence to improve ad monetization. Irenic also recommends a stock buyback with the share...

 Update - Nov. 5, 2025 Perplexity AI deal completely changes the investment story when combined with subscriptions. The AHs trade at $9 is just the start of the AI rally.  -Starting in early 2026, Perplexity will appear in the chat interface for Snapchat users around the world, the companies said. -Perplexity will pay Snap $400M over one year, through a combination of cash and equity, as the company rolls the service out globally. Snap expects revenue from the partnership to begin contributing in 2026. Original article posted on Aug. 8 Snap's post-earnings slump is overdone; the market is ignoring strong subscription growth and undervaluing future revenue streams. The social messaging subscription business is gaining traction, with nearly 16 million subscribers and new higher-priced tiers like Lens+ and Platinum boosting potential revenue. Despite weak ad growth, Snap's Q3 guidance beats consensus, and the stock trades at a deep discount compared to peers like Pinterest and Re...

Update - July 25, 2025 Nextdoor surged following the launch of the NEXT platform and switch of the ticker to "NXDR", but the stock has sold off the last 4 days providing an ideal entry point.  Original article posted on June 4 Nextdoor Holdings, Inc. trades near cash value, presenting a compelling risk/reward as it prepares to launch its transformative NEXT platform. Management paused monetization and user growth to focus on NEXT, temporarily depressing revenue but setting up for a major turnaround. NEXT aims to deliver hyper-local content, professional news, and AI-driven recommendations, addressing past engagement and monetization challenges. The stock trades at less than 1x EV/S targets due to a strong cash position, limiting downside risk while the upcoming platform relaunch offers significant upside potential. Just as  Nextdoor Holdings, Inc.  ( KIND ) is set to launch a new user interface, the stock trades at all-time lows. Despite a promising turnaround in place, t...

Update - June 30, 2025 Meta  quickly rallied to a new high today at $748 on the Superintelligent Labs and quickly eversed in a potential sign of a top. In a bid to lead the next wave of AI innovation, Meta ( NASDAQ: META ) is creating a “superintelligence” division dedicated to developing cutting-edge artificial intelligence technologies. Meta Superintelligent Labs will be led by Alexandr Wang, the former CEO of Scale who Meta ( NASDAQ: META ) lured away after making a $14.3B investment for a 49% stake in the company. Along with Wang, a select group of Scale employees and researchers from OpenAI, Anthropic and Google ( GOOG ) have also joined the Meta superintelligence team. In a letter to employees viewed by Bloomberg, Meta CEO Mark Zuckerberg said, “as the pace of AI progress accelerates, developing superintelligence is coming into sight. I believe this will be the beginning of a new era for humanity, and I am fully committed to doing what it takes for Meta to lead the way.” ...

Update - May 27, 2025 Trump Media is selling $1.5B in stock and issuing $1B in senior convertible notes to buy cryptocurrencies in an odd move, probably due to the social media failing to gain any traction. Investors have no reason to buy this stock for bitcoin, instead of just front running Trump.  -Trump Media and Technology Group ( NASDAQ: DJT )  plans to raise  $2.5B in stock and senior secured notes in a private placement with ~50 institutional investors in which to create the largest Bitcoin treasury of a public company. -“We view Bitcoin as  an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets…and help defend our company against harassment and discrimination by financial institutions,” said Trump Media CEO Devin Nunes. Original Article posted on January 29 President Trump has appeared to focus on meme coins over improving Trump Media, leading to a lack of promotion for Truth Social. Meme coins TR...

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...

Update - Feb. 28, 2025 Nextdoor reported another strong quarter.  Q4 Revenue of $65.23M (+17.4% Y/Y)  beats by $2.11M . Adjusted EBITDA was $3.0 million, compared to a $14.0 million loss in the year-ago period, reflecting 30 percentage points of year-over-year margin improvement. The social media company guided to weak Q1 results due to going full speed ahead with the NEXT UI updates. This is great news for  investors, but the stock is down some 30% due to the markets short-term focus.  The stock trades at near cash value of $427 million.  Originally posted on Nov. 8 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 » Nextdoor has achieved a significant turnaround under the return of founding CEO Nirav Tolia, with 17% revenue growth and record WAUs. The company nearly eliminated losses, reporting a Q3 adjusted EBITDA loss of just $1 million, and expects to be cas...

Update - Jan. 29, 2025 Meta with another big quarter, Q1 guidance was wonky though. Another big beat in the March quarter and Meta beats the current consensus estimates. -Q4 GAAP EPS of $8.02 beats by $1.26. -Revenue of $48.39B (+20.6% Y/Y) beats by $1.4B. CFO Outlook Commentary: We expect first quarter 2025 total revenue to be in the range of $39.5-41.8 billion vs. consensus of $41.62B. This reflects 8-15% year-over-year growth, or 11-18% growth on a constant currency basis as our guidance assumes foreign currency is an approximately 3% headwind to year-over-year total revenue growth, based on current exchange rates. Original article posted on Jan. 22 Meta Platforms, Inc.'s stock remains attractive due to AI and Metaverse opportunities, even after the stock's massive run in the last couple of years. The company has a massive catalyst in smart glasses with an aim to replace smartphones in the future, warranting Reality Labs' $17+ billion annual loss. The stock could reach $...

  Update - Jan. 16, 2025 Biden's Admin. actions while leaving office will likely be ignored. Any Snap dip is a buying opportunity.  -The Federal Trade Commission has referred a complaint against Snap Inc. (NYSE:SNAP) to the Department of Justice, according to a public statement made by the U.S. government agency Thursday. -The complaint against the Snapchat parent is connected to the deployment of "My AI" chatbot on the company's platform, which the agency alleges poses risk to young users. -The agency said that during its additional investigations on Snap for potential violations of the FTC act, it found reason to believe the company "is violating or is about to violate the law." It added that a proceeding is in the public interest, and as per procedures outlined in the FTC act, it referred the complaint to the Justice Department. Original article posed on Dec. 8 Snap trades near recent lows despite record revenues and a booming subscription business. The c...

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 » Update - Nov. 8, 2024 Pinterest reported pretty solid Q3'24 numbers. The dip back to the lows around $30 makes no sense. The market is disappointed in guidance, but Pinterest still expects at least 15% growth.  -Q3 Non-GAAP EPS of $0.40 beats by $0.06. -Revenue of $898.37M (+17.7% Y/Y) beats by $1.93M. Outlook: For Q4 2024, we expect revenue to be in the range of $1,125 million to $1,145 million vs. consensus of $1.14B, representing 15-17% growth year over year. Original article posted on Nov. 5 Pinterest is set to report Q3'24 results on November 7, with consensus estimates reflecting strong growth. Despite market disappointment with original Q3 guidance, the business focus on social commerce and AI tools is driving higher engagement and ad budget gains from major brands. PINS stock is undervalued, trading at 18x 2025 EPS targets,...

Update - Oct. 29 Snap with another strong quarter. At $10, the stock trades like the social messaging play has no growth.  Q3 Non-GAAP EPS of $0.08  beats by $0.03 . Revenue of $1.37B (+15.1% Y/Y)   beats by $10M . Daily Active Users increased 9% year-over-year to 443 million Total time spent watching content increased 25% year-over-year. Update - Sept. 19 Snap making a run after a solid Partner Event with a focus on AI and A/R glasses. The stock could quickly close the gap to $13.  Originally posted on Sept. 8 Snap has fallen to multi-year lows despite strong sales growth and a promising subscription service, making it an undervalued investment below $9. The social messaging company reported 850 million MAUs and 432 million DAUs, with Snapchat+ boosting subscriptions to 11 million. The market is overly focused on volatile advertising revenue, ignoring Snap's potential $700 million in recurring subscription fees by the end of 2024. SNAP stock trades at only 3x forwar...