It’s been a year since Reddit (RDDT) went public. In this updated report (March 11, 2025), we’ll analyze why Reddit’s stock has dropped, review its current March 2025 price trends, and revisit the key takeaways from the latest Q4 earnings report. We’ll also examine the company’s potential risks and future outlook, evaluate analysts’ price predictions for RDDT stock, and ultimately answer the key question: Should you buy Reddit stock or is it better to sell?
Why Is Reddit (RDDT) Stock Dropping?
In short: Trump, a top Reddit executive, and Google. But let’s break it down so it’s clear to everyone—not just experienced investors, but also beginners.
Donald Trump’s policies. This isn’t exactly breaking news—his presidency has reignited trade wars, creating uncertainty in global markets. As a result, volatility has surged, and many investors are panic-selling their stocks due to the uncertain outlook for the stock market.
Insider stock sales. RDDT shares plummeted by over 15% on March 10, 2025, following insider trading reports. It was revealed that Lee Benjamin Seong, Reddit’s General Counsel, sold around $14.52 million worth of company shares in early March. Insider sales of this scale often trigger negative market sentiment and put downward pressure on stock prices.
Google’s search algorithm changes. During the Q4 earnings report in early February, Reddit reported 101.7 million daily active unique users, falling short of the 103.3 million expected by analysts due to changes in Google’s search algorithms. This discrepancy raised investor concerns and contributed to the stock’s decline. However, Reddit’s leadership noted that traffic had started recovering in Q1 2025.
Analyzing Key Metrics RDDT – March 2025
As of March 10, 2025, Reddit’s stock is trading at $122–$123. Since the beginning of the year, RDDT shares have dropped by over 25%, bringing the company’s market capitalization down to $22 billion.
One notable point is the daily trading volume, which reached 14.15 million shares—significantly higher than the average daily volume of 6.316 million shares. This spike in trading activity suggests heightened investor interest and volatility surrounding the stock.
Reddit Q4 2024 Earnings Report: What It Means for RDDT Stock
Let’s take a look back at Reddit’s latest quarterly report. Sometimes, reviewing key financials can be useful when making a decision: Should I Buy Reddit Stock?
On February 12, 2025, Reddit closed Q4 2024 with impressive financial results. The company’s total revenue grew by 71% year-over-year, reaching $427.7 million, with $394.5 million coming from ad revenue—a 60% increase compared to the previous year. Net income for the quarter was $71 million, a significant jump from $18.5 million the year before.
Despite strong financials, user growth fell short of expectations, as mentioned earlier. Daily Active Users (DAU) increased by 39%, but still missed analyst expectations by 1.6 million users. It’s worth noting that stock prices often hinge on meeting market expectations, and in this case, the shortfall likely contributed to investor concerns.
RDDT Risks in 2025: Key Challenges for Investors
We always highlight risks in our analyses—it’s important to consider both positives and negatives when making an informed investment decision in RDDT. Here are the three main risks to keep in mind:
1. Dependence on Search Engine Algorithms. Unfortunately, Reddit’s growth relies heavily on external companies like Google. If Google adjusts its algorithms again, it could negatively impact user growth, just as it did earlier this year.
2. Competition in the Social Media Market. Reddit faces fierce competition from X (formerly Twitter), Threads, and Meta. These platforms aggressively compete for user engagement and advertising revenue, which could slow Reddit’s expansion.
3. High Valuation Risk. A high valuation can limit stock growth potential and increase the risk of a market correction. Despite the recent price dip, Reddit’s stock has surged over 140% in just one year (March 2024 to March 2025), even with its current price around $120.
Reddit Stock Price Prediction 2025
According to MarketBeat, based on evaluations from 22 Wall Street analysts, RDDT stock currently holds a consensus rating of “Moderate Buy.” Among all analysts, only 1 recommends “Sell”, 9 advise “Hold”, 11 see Reddit as a “Buy,” and 1 analyst has given it a “Strong Buy” rating.
As for the 12-month price target, the average estimate stands at $175.95, which represents a 40%+ upside based on the current stock price as of March 10, 2025. However, as always, analyst projections vary widely—the most bullish forecasts reach up to $250.00, while bearish analysts predict a drop to $54.00.
Should I Buy Reddit (RDDT) Stock?
I’d like to share my personal experience. I ultimately decided to buy Reddit stock during the dip in March 2025. On March 7, 2025, I purchased 2 shares at $145 and another 2 shares at $136.
When the stock dropped to $110, I considered adding more but hesitated. I figured it would make more sense to buy if it approached $100. However, from my perspective, RDDT remains an interesting stock for the long term, which is why I’m keeping my “Hold/Buy” rating. It’s worth watching, as the past few days have been highly volatile. Have we hit a new bottom, or will the decline continue? At this point, it feels like a rhetorical question.
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This article is for informational purposes only and does not constitute financial advice. The content reflects the author’s opinion and should not be interpreted as an investment recommendation.
