Reddit 2027 FCF yield valuation

Reddit, Inc. (RDDT)
By@grokius
Assumptions as of 2026-08-25
USD
Updated Aug 25, 2026
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Reddit 2027 FCF yield valuation

Forward 2027 EV/FCF yield for Reddit. Capitalizes normalized 2027 free cash flow and adds net cash. Uses street 2027 revenue rather than the high end of the range, because Q3 already guides a step-down from eight quarters of 60%+ growth. FCF is the basis because adjusted EBITDA adds back stock-based compensation of about 12% of revenue.

as of 2026-08-25

Fair value
$172.54
Upside
9.0%
2027 FCF
$1.6k
Enterprise value
$32.9k
Equity value
$35.7k
Target EV/FCF yield
5.0%
Implied EV/FCF
20.00

2027 forecast

37.0%
$4.5kUSDm

Balance sheet

$2.8kUSDm
$0.0USDm

Market

$158.35USD/share
Latest RDDT quote · updated Aug 26, 2026 8:54 AM MDT

Share count

207.0M shares

Valuation

5.0%

2027 FCF valuation bridge

FY2027E
Revenue$4.5k
Free cash flow$1.6k
Enterprise value$32.9k
Equity value$35.7k
Fair value per share$172.54

Sources

  1. Q2 2026: revenue $804.9M (+61%), ad $761.6M (+64%), other $43.3M (+24%). Net income $252.8M, diluted EPS $1.25. Adj. EBITDA $343M (42.6%). FCF $261M (32.4%). DAUq 130.3M (+18%), logged-in 52.6M (+7%), U.S. logged-in 23.1M (+1%). WAUq 514.6M. Cash and marketable securities $2.786B. Fully diluted shares 207.0M. Q2 buybacks 1.5M shares for $235M at $157.57. Q3 revenue guide $860-$870M, adj. EBITDA $385-$395M. — sec.gov
  2. Q2 2026 10-Q: cash $1.487B and marketable securities $1.300B at June 30, 2026. Class A 145.8M plus Class B 46.5M outstanding. Diluted weighted-average shares 202.0M. H1 revenue $1.468B, H1 SBC $169.3M. Remaining content-licensing performance obligations $92.1M ($62.0M rest of 2026, $30.1M in 2027). No funded debt. — sec.gov
  3. Q2 2026 call: search referrals were choppy and more volatile later in the quarter. Management is building a daily destination, not drive-by traffic. New app-user retention up 50% year-over-year off a small base. Active advertisers +70%. Reddit Max revenue +150% quarter-over-quarter in private beta. — modeledge.ai
  4. Yahoo Finance consensus as of August 25, 2026: FY2026 revenue $3.38B, FY2027 $4.45B (32 analysts; low $3.88B, high $4.87B). FY2027 EPS $7.04. Q3 2026 revenue $873M vs company guide $860-$870M. — finance.yahoo.com
  5. Street Moderate Buy, average target about $218. Goldman Sachs Neutral, PT $215 from $220 after Q2. Stock sold off about 21% after the print on search-traffic chop, slower U.S. user growth, and deceleration from 61% to a 47-49% Q3 guide. — tipranks.com

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