Reddit’s explosive revenue growth of the past two years turbocharged the company’s stock after its 2024 initial public offering, lifting it nearly 700% to its highs of around $270 last fall. That rally was markedly different from the tepid performance that similarly sized social media companies such as Snap and Pinterest endured after their public debuts in 2017 and 2019, respectively.

In hindsight, that’s not surprising. Reddit’s IPO turned out to be underpriced relative to its growth potential, giving it much more room to rise. The stock went public at around six times forward sales, well below where either Snap or Pinterest went public, according to Koyfin data. And while Snap, in particular, showed signs of weakening user growth within a few months of its public debut, Reddit’s advertising business unexpectedly took off. Total revenue rose 62% in 2024, much more than expected at the time of the IPO, and another 69% in 2025. But lately one set of metrics—growth in the most engaged U.S. users in 2025—has painted a more sobering picture. And it likely helps explain why Reddit stock has fallen 42% in the past five weeks.