Reddit Gains From Strong User Growth: Can It Outpace PINS & SNAP?

Reddit RDDT is benefiting from robust user growth, positioning itself as a formidable competitor to platforms like Pinterest PINS and Snap SNAP in the digital advertising market. In the second quarter of 2026, Reddit's daily active uniques (DAUq) reached 130.3 million, marking an 18% year-over-year increase, while weekly active uniques (WAUq) increased to 514.6 million, up 24%. International DAUq rose 28%, outpacing U.S. growth at 6%, and international WAUq rose 35%, signaling strong global momentum. 

Growing engagement is translating into stronger monetization. In the second quarter of 2026, Global average revenue per unique (ARPU) jumped 36% year over year to $6.18. U.S. ARPU surged 51% to $11.85, while international ARPU increased 31% to $2.26. Advertising revenues consequently climbed 64% to $762 million. Active advertisers increased more than 70%, and revenues from Reddit’s scaled channel, which includes mid-market and small and medium-sized businesses, doubled year over year. Conversion volume increased more than 100%, while click volume rose more than 30%.

Reddit is benefiting from successful product innovation and user engagement strategies. The company’s focus on improving the experience for new users, particularly through updated feed models and easier posting mechanisms, has led to a 50% year-over-year increase in new app user retention. Features like video in comments and interactive games have expanded engagement opportunities, while efforts to convert web users to app users have resulted in higher retention and more valuable user cohorts. 

While Pinterest and SNAP have established user bases, Reddit's accelerating growth, international expansion, and strong monetization trends suggest it is well-positioned to outpace these rivals if current momentum continues. For the third quarter of 2026, management expects revenues between $860 million and $870 million, representing 47% to 49% year-over-year growth. The midpoint implies about 48% year-over-year growth.

RDDT Faces Stiff Competition

Reddit is facing stiff competition from competitors like Snapchat and Pinterest, which are also expanding into advertising to compete in the rapidly growing digital ad market.

Snapchat reached 971 million monthly active users and 493 million daily active users in the second quarter of 2026, driven by continued adoption of Augmented Reality Lenses, Spotlight, and AI-powered features. SNAP’s global community reached 493 million daily active users in the second quarter, up 5% year over year and from 483 million in the prior quarter. 

Pinterest is benefiting from solid user engagement across all regions. In the second quarter of 2026, Pinterest witnessed 11% year-over-year growth in global monthly active users to 640 million.

RDDT’s Share Price Performance, Valuation and Estimates

RDDT shares have plunged 29.3% year to date, underperforming the broader Zacks Computer & Technology sector’s 14.4% appreciation and the Internet - Software industry’s 4.5% decline.

RDDT Stock Performance

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RDDT shares are overvalued, with a forward 12-month Price/Sales of 7.64X compared with the Computer & Technology sector’s 6.26X. RDDT has a Value Score of D.

RDDT Valuation

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The Zacks Consensus Estimate for 2026 earnings is pegged at $5.27 per share, which has increased 8.65% over the past 30 days. This suggests 101.15% year-over-year growth.

Reddit Inc. Price and Consensus

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

Reddit 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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