Citizens reiterated its Market Outperform rating on Reddit, assigning a $300.00 price target that the firm says implies more than 115% upside from prevailing share levels. The analyst note emphasized the acceleration of advertising revenue and a roster of near-term commercial catalysts that could support continued top-line expansion.
Ad revenue growth accelerated to 75% year-over-year in the fourth quarter of 2025, up from a 61% year-over-year rate in the same quarter a year earlier. That advertising performance is consistent with Reddit’s broader revenue strength, which registered 69.4% growth over the last twelve months and a five-year compound annual growth rate of 57%.
Citizens outlined several specific drivers that could sustain the company’s momentum. These include wider rollout of Reddit Answers, broader adoption of Reddit Max, maturation of shopping ads, and improvements to the platform’s recommendation algorithms designed to increase relevance for users and advertisers. The firm also expects that upcoming licensing renewals with artificial-intelligence partners could produce favorable outcomes over the next year, reflecting demonstrated value of Reddit’s content.
On valuation, Citizens highlighted a 2027 estimated free cash flow to enterprise value yield of 6.6%, which it equates to an approximately 15.3x multiple. The note underscores the fact that Reddit is actively repurchasing shares and pointed to a current price-to-earnings ratio near 54. Citizens also cited a price/earnings-to-growth ratio of roughly 0.28, arguing that the PEG may indicate attractive valuation relative to Reddit’s growth profile.
Reddit’s most recent quarterly filings showed revenue of $725.6 million in the fourth quarter of 2025, a 70% year-over-year increase. Adjusted EBITDA rose 112% in the quarter, exceeding Needham’s estimates by 16%.
Broker reactions to the results were mixed. Piper Sandler trimmed its price target to $205 while maintaining an Overweight rating, citing valuation concerns. Cantor Fitzgerald lowered its price target to $170 and retained a Neutral stance, pointing to user-growth uncertainties. By contrast, Truist Securities lifted its target to $275 and described Reddit’s results as a "Classic Beat & Raise." Separately, the company announced a new $1 billion share buyback program.
Despite a reported decline in global time spent on the platform, Citizens reiterated its Market Outperform view with the $300 target. Needham also maintained a Buy rating and a $300 price target in the wake of the quarterly results.
Context and implications
Citizens’ outlook rests on continued advertising strength and product rollouts that could expand monetization channels. The firm’s valuation math and the company’s buyback program factor into its conviction that the shares could be materially higher from current levels, even as some brokers emphasize valuation and user-growth risks.