Day 1: Read analyst's review about the stock.

$Reddit(RDDT.US)$ According to Motley Fool, there are 5 Biggest Risks for Reddit Investors. I summarized them as follows:
1. Its user growth is unpredictable
Reddit ended 2023 with 73.1 million daily active unique users or DAUq across it platform. That represented a 27% increase from a year earlier -- but only half of those users were logged in. Reddit warns that its DAUq growth could "fluctuate or decrease" after certain events like the COVID-19 pandemic. These unpredictable growth spurts can set it up for tough YOY comparisons, and makes it more challenging to predict the long-term growth trajectory of Reddit's audience than other social media platforms.
2. It's struggling to monetize its U.S. audience
Reddit's DAUq in the U.S. grew 33% year over year and accounted for nearly half of its daily audience in the fourth quarter of 2023. Its international DAUq only rose 21%. But Reddit's average revenue per user or ARPU in the U.S. declined 7% year over year in the fourth quarter, marking the region's second consecutive quarter of decelerating ARPU growth -- and caused its total ARPU to decline 2% year over year. Meta Platforms' ARPU in the U.S. and Canada rose 16% year over year in the fourth quarter of 2023.
3. Growth could be derailed by browser and OS changes
In its registration filing, Reddit noted that web and mobile browser developers like those from Apple, Microsoft, and Alphabet are implementing changes that might "impair" its ability to measure traffic and the "effectiveness of advertising" on its platform. It warns that Apple's new privacy updates for iOS apps and Safari, Google's elimination of third-party cookies on Chrome, and other changes could all reduce its ad sales.
4. It's heavily dependent on unpaid moderators
At first glance, Reddit's financials seem to be improving. It expects its revenue to increase at least 20% this year and for its bottom line to break even on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis. However, Reddit is still overwhelmingly dependent on its army of unpaid moderators to enforce its rules and clean up its communities. It admits that if it fails to retain its moderators or maintain good working relationships with them, its business could falter. Reddit offered its top moderators a chance to participate in its IPO, but many of them rejected the offer.
5. It expects to be challenged by generative AI platforms
Lastly, Reddit warns that in addition to search engines and social networks, it faces competition from generative AI platforms like OpenAI's ChatGPT, Google's Gemini, and Amazon-backed Anthropic. It admits that its users might choose to look up information with those platforms that "may have been trained using Reddit data" instead of directly visiting Reddit.
Comment: For investors to hold the stock for the long term, we need to know the risk. As a new stock, it is not possible to find enough analyst review. Hence reading articles like this will give a guide on the fundamentals of the company and its intrinsic value. I also used the Moomoo Analyst Rating feature and found only one with a target price of 54 USD by New Street. Unfortunately there wasn't much detail given.

Source:
The 5 Biggest Risks for Reddit Investors | The Motley Fool