Needham's Laura Martin has reiterated a Buy rating and a $300.00 price target on Reddit (NYSE: RDDT) in the wake of the company's fourth-quarter 2025 financial release. At the time cited, the $300 target implies more than 114% upside from a share price of $139.83, and InvestingPro data referenced a strong analyst consensus with a 1.94 recommendation (where 1 is Strong Buy).
The company reported Q4 2025 revenue of $725.6 million, a year-over-year increase of 70%, and that top-line figure exceeded Needham's projection by 9%. Reddit's adjusted EBITDA for the quarter was $327 million, up 112% year-over-year and 16% ahead of Needham's expectations. On a non-GAAP basis, earnings per share were $1.72, a 99% increase from the prior year and 18% higher than Needham had forecast.
Advertising revenue was the primary driver of the revenue increase, rising 75% year-over-year. The company also reported average revenue per user (ARPU) up 44% and user growth of 18% for the quarter.
In maintaining its outlook, Needham identified Reddit as its top pick for 2026 and pointed to the platform's positioning around "100% human-created content," an attribute the firm said should become relatively more valuable as AI language models proliferate. Needham also cited what it called "execution excellence," noting more than 60% revenue growth across the past six quarters.
The research note emphasized Reddit's competitive position, arguing that the difficulty of reproducing a human community like Reddit creates a "deep moat" for the business.
Other broker responses to the quarter were mixed, reflecting different interpretations of the same set of results. Truist Securities raised its price target to $275, characterizing Reddit's performance as a "Classic Beat & Raise" and pointing to the company's announcement of a new $1 billion share buyback program. Guggenheim raised its target to $255, praising revenue and profit growth that exceeded company guidance and highlighting strong results across usage metrics and future advertising initiatives.
At the same time, some firms trimmed their targets despite acknowledging the strong financials. Piper Sandler lowered its target to $205 while noting Reddit's strong revenue growth and profitability; the firm cited that revenues and EBITDA beat its forecasts by 9% and 17%, respectively. Cantor Fitzgerald reduced its target to $170, flagging concerns about user growth even as Reddit's revenue and EBITDA exceeded street estimates by 9% and 14%, respectively.
Needham reiterated that the quarter surpassed its own expectations by 9% on revenue and 16% on adjusted EBITDA, supporting its maintained $300 target.
The quarter's results produced a range of analyst revisions, with some brokerages increasing price targets and others dialing them back. The divergence highlights differing emphases among analysts on growth metrics, user trends and the implications of buybacks for shareholder returns.
Summary metrics from the quarter include:
- Revenue: $725.6 million, up 70% year-over-year;
- Adjusted EBITDA: $327 million, up 112% year-over-year;
- Non-GAAP EPS: $1.72, up 99% year-over-year;
- Advertising revenue: +75% year-over-year;
- ARPU: +44%; user growth: +18%.
These figures underpinned both the positive reaffirmation from Needham and the varied reactions from other research teams.