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DA Davidson trims Reddit price target as user growth faces pressure
The firm kept a Buy rating after pointing to Similarweb data suggesting global daily active users could fall below consensus, even as Q2 revenue and net income rose.
DA Davidson lowered its price target on Reddit, Inc. (NYSE: RDDT) from $200 to $185 while maintaining a Buy rating, citing near term risks to the company’s daily active user growth.
The firm pointed to Similarweb web traffic data showing continued pressure on global daily active users, adding that September traffic trends could remain challenging based on Reddit’s historical seasonality. DA Davidson said stronger app engagement could still support higher average revenue per user.
Reddit’s latest results provided support for the bullish case, with Q2 2026 daily active uniques up 18.0% year over year to 130.3 million. Revenue reached $805 million, marking Reddit’s eighth consecutive quarter with more than 60.0% year over year revenue growth.
Profitability also improved, with Q2 net income rising to $253 million, up $164 million from the prior year period. Despite the strong quarter, Yahoo Finance noted the stock is down more than 30.0% year to date, while hedge fund ownership increased to 91 funds and short interest stood at 13.96% as of August 31.