Reddit (RDDT) $157 is a steal at this price

• Reddit is a unique, subreddit-driven social media platform that cannot be easily replicated.
• Targeted advertising following users’ explicit interests and intent within subreddits is far more valuable to advertisers and a huge competitive advantage.
• Concerns about AI and chatbots disrupting RDDT are unfounded given its distinctive human community-driven model.
• Its unique flywheel of subreddits generating great content leading to more users generating even more valuable content for advertisers is a deep moat and not valued enough.
• Reddit’s valuation is an absolute steal with a low PEG ratio of 0.3. I am upgrading RDDT to a strong buy, actively accumulating shares between $150 and $160.

Reddit, like other social media and media platforms/publishers, has become vulnerable to Google search as the advent of AI Overviews and Gemini reduces traffic Reddit's way.

The courts just handed Reddit a key victory today in its suit against Anthropic, validating its claim that Anthropic had scrubbed data without permission.

Reddit’s valuation is an absolute steal—it is selling for just 29x 2026 earnings with a ridiculous PEG ratio of 0.3. If we smoothened it for the next 4 years, the P/E of 22 for an earnings CAGR of 25% works out to 0.88 - again very cheap. Similarly, the P/S multiple is only 8.6, which translates to a P/S growth of only 0.2. This is an asset-light company with a gross margin of 91% and an operating cash flow margin of 33%.

Here is the entire article on Seeking Alpha: