Last Updated: 11 Sep 2024
Executive Summary
Reddit, Inc. (RDDT) is a leading social media platform with a market capitalization of approximately $9.8 billion. Despite strong revenue growth, the company remains unprofitable, with negative EBITDA and EPS. The stock is currently trading at $56.87, below its analyst target price of $60.46.
Company Overview
Reddit is a website that organizes digital communities, known as subreddits. Users can post and share content, comment on others' posts, and vote on content. The platform is known for its diverse and passionate user base, which spans a wide range of interests.
Fundamental Analysis
Revenue: Reddit's revenue has grown significantly in recent years, reaching $883.25 million in the trailing twelve months (TTM). The company's revenue is primarily driven by advertising.
Earnings: Reddit remains unprofitable, with a negative EBITDA of $644.71 million TTM. The company's operating margin is also negative (-2.425%).
Valuation: Reddit is trading at a price-to-sales ratio (P/S) of 11.12 and a price-to-book ratio (P/B) of 5.64. These valuations are relatively high compared to other social media companies.
Technical Analysis
Trend: Reddit's stock price has been trending sideways in recent months, with a 50-day moving average of $50.23 and a 200-day moving average of $50.61.
Support and Resistance: The stock has support at around $50 and resistance at around $60.
Momentum: The stock's momentum is currently neutral, with the relative strength index (RSI) at 50.
Short Term Outlook
In the short term, Reddit's stock is likely to continue trading sideways. The company's fundamentals remain weak, and the stock is trading at a premium valuation. However, the stock could see some upside if the company can continue to grow its revenue and improve its profitability.
Long Term Outlook
In the long term, Reddit has the potential to be a successful company. The platform has a strong and engaged user base, and the company is well-positioned to benefit from the continued growth of the social media market. However, the company will need to improve its profitability in order to justify its current valuation.
Analyst Recommendations
Seven analysts have issued ratings on Reddit, with two recommending a strong buy, five recommending a buy, and six recommending a hold. The average analyst target price is $60.46.
