Can Reddit's International Expansion Drive More Upside in the Stock?

Reddit RDDT is benefiting from its focus on international expansion, which has emerged as a major growth driver for the company. In 2025, the company reported 76% year-over-year growth in international revenue, reaching $417 million. This growth rate outpaced its U.S. revenue increase of 68%, highlighting the immense potential of global markets in driving Reddit’s overall revenue growth.

The platform’s international daily active unique users (DAUq) grew 28% year over year to 68.9 million, while logged-out DAUq surged 40%. These metrics demonstrate Reddit’s ability to attract and engage users outside the United States, which is critical for its advertising revenue. In 2025, Reddit’s ad revenue increased 74% year over year to $2.1 billion, showcasing the platform’s success in monetizing its growing user base.

The company’s ability to attract advertisers across geographies and verticals is evident, with 11 out of its top 15 verticals growing revenue by 50% or more year over year. This broad-based growth highlights the scalability of Reddit’s advertising platform and its potential to capture more market share internationally.

Reddit’s international expansion is further supported by its efforts to localize its platform. For instance, the rollout of Reddit Answers in five new languages in the fourth quarter of 2025 has significantly increased search volume and user engagement. With more than 80 million people searching directly on Reddit every week, up from 60 million a year ago, the platform is becoming an end-to-end search destination for users worldwide. Reddit Answers, the AI-powered search feature, saw growth in queries, increasing from 1 million to 15 million over the year.

RDDT’s expanding international portfolio and rising user engagements are expected to drive the company’s top-line growth. For the first quarter of 2026, RDDT expects revenues between $595 million and $605 million.

RDDT Faces Stiff Competition

RDDT is facing stiff competition from competitors like Pinterest PINS and Snap SNAP, which are also expanding their global footprint to compete in the rapidly growing digital ad market.

Snap has reached 946 million monthly active users, driven by continued adoption of Augmented Reality Lenses, Spotlight, and the My AI chatbot. Snap’s global community reached 474 million daily active users in the fourth quarter of 2025, up 5% year over year.

Pinterest is benefiting from solid user engagement across all regions. In the fourth quarter of 2025, Pinterest witnessed 12% year-over-year growth in global monthly active users to 619 million.

RDDT’s Share Price Performance, Valuation, and Estimates

RDDT shares have plunged 38.6% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector and the Internet - Software industry’s decline of 6.1% and 18.2%, respectively.

RDDT Stock's Performance

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RDDT shares are overvalued, with a forward 12-month Price/Sales of 7.85X compared with the Computer & Technology sector’s 5.81X. RDDT has a Value Score of D.

RDDT's Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 earnings is pegged at $4.02 per share, which remained unchanged over the past 30 days. This suggests 53.44% year-over-year growth.

Reddit Inc. Price and Consensus

Reddit Inc. price-consensus-chart | Reddit Inc. Quote

RDDT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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