Reddit (RDDT) focuses on real-time, interest-based discussions with over 100,000 active communities. User engagement is on the rise, with DAUq and WAUq increasing by 31% in Q1. Average revenue per user also saw a 23% boost. Reddit’s ad business grew by 61% in Q1, with sustained user activity expected to drive further growth.

Competition is stiff for Reddit, with Meta Platforms (META) and Nextdoor (KIND) leading in ad revenue scaling through user engagement. Meta Platforms utilizes AI-powered ad delivery and a vast user base, while Nextdoor expands its localized performance ad model, mirroring Reddit’s community-driven strategy.

Reddit’s stock has declined by 10.9% YTD, trading at a premium with a forward P/S of 12.62X. The Zacks Consensus Estimate for 2025 earnings is $1.21 per share. Reddit carries a Zacks Rank #4 (Sell) with a Value Score of F.

Zacks Investment Research offers a list of 5 stocks poised to double in value, including disruptive forces with notable growth, bullish signs signaling a dip to buy, and leaders in red-hot industries. These picks provide a great opportunity for investors looking to capitalize on potential market growth.

Read more at Nasdaq: Can Improving User Engagement Push the Reddit Stock Higher?