How Much Should This Fall Change Your View Of Reddit Stock?
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Reddit (RDDT) stock fell 41.4% between May 7 and November 3, 2026, while the S&P 500 returned 3.7% over the same dates. The stock suffered its largest one-day drop of that stretch on October 30. That decline came the day after Reddit reported its third quarter and said its daily users could fall in the fourth. So how big is that warning about daily users against the business Reddit runs today?
Reddit Warned That Its Daily Users Could Fall
The warning applies first to the user count, and less directly to revenue. During an October 29 call, management said daily users could fall by a low double-digit percentage in the fourth quarter from a current base of 130 million, if an October drop in visitors from search continues. Yet logged-in users generate over 80% of Reddit’s revenue, management said on the same call, adding that engagement from its app and logged-in users is still growing. A still significant number of users arriving from search land on the mobile website instead of the app, management also said.
Most of the six-month decline occurred late in the period. Reddit stock fell 29.2% on October 30 alone, and it lost 36.1% between October 5 and November 3, a period when the S&P 500 lost 2.6%.
Holders face a second risk. During the fourth quarter, Reddit will begin testing a logged-in-only version of the site in select markets outside the U.S., and management expects to trade some reach for engagement.
How Fast Does Reddit Now Expect Sales To Grow?
Management said on the call that Reddit expects fourth-quarter revenue of $1 billion to $1.03 billion, up 38% to 42% from a year earlier. That pace trails the 53% growth Reddit reported for the third quarter. Revenue growth had already eased in each quarter of 2026, slowing from 69.1% in the first.
The decline has made Reddit’s profits much cheaper to buy. At the November 3 close, the stock traded at 18.7 times its last twelve months of earnings, against 22.8 for the S&P 500. At the end of September, that multiple stood at 27.7.
Reddit Still Earns Far More Than A Year Ago
Reddit’s latest financial figures run through September, capturing the period before most of the stock’s decline. The company posted an operating margin of 29.4% over the twelve months to September 30, 2026, compared with 13.8% over the twelve months before. Over the same twelve months, Reddit produced $1.2 billion of free cash flow.
Reddit also carries almost no debt, ending September with $3.03 billion in cash and short-term investments against about $31 million of debt. So far the warning is about users, while Reddit’s margin and cash stand where its last report placed them. The number to watch is Reddit’s daily user count, the figure management warned about, when the company reports its fourth quarter, expected in February 2027.
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