Analyzing Reddit (RDDT) & Its Competitors

Reddit (NYSE:RDDT) is one of 151 public companies in the “Data processing & preparation” industry, but how does it weigh in compared to its competitors? We will compare Reddit to similar businesses based on the strength of its earnings, analyst recommendations, risk, dividends, valuation, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Reddit and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	2	9	11	1	2.48
Reddit Competitors	882	4663	6232	165	2.48

Reddit presently has a consensus target price of $162.68, indicating a potential upside of 49.70%. As a group, “Data processing & preparation” companies have a potential upside of 22.28%. Given Reddit’s stronger consensus rating and higher possible upside, equities analysts clearly believe Reddit is more favorable than its competitors.

Earnings and Valuation

This table compares Reddit and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-14.06
Reddit Competitors	$5.51 billion	$11.45 million	-12.48

Reddit’s competitors have higher revenue and earnings than Reddit. Reddit is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Reddit and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reddit	-37.25%	-24.71%	-22.52%
Reddit Competitors	-158.77%	-1,791.07%	-8.24%

Institutional and Insider Ownership

46.1% of shares of all “Data processing & preparation” companies are owned by institutional investors. 20.2% of shares of all “Data processing & preparation” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Reddit competitors beat Reddit on 7 of the 12 factors compared.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.