Reddit, Inc. (NYSE: RDDT)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001713445
Market Cap 25.97 Bn
P/B 8.87
P/E 49.02
P/S 11.79
ROIC (Qtr) 15.62
Div Yield % 0.00
Rev 1y % (Qtr) 69.65
Total Debt (Qtr) 23.21 Mn
Debt/Equity (Qtr) 0.01
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About

Investment thesis

Bull case

  • Strong operating cash flow of 690.88M provides robust 29.76x coverage of total debt 23.21M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 953.57M provide 135.78x coverage of short-term debt 7.02M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 3.18B provides 137.05x coverage of total debt 23.21M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 684.17M exceeds capital expenditure of 6.71M by 102.02x, indicating strong organic growth funding capability.
  • Operating cash flow of 690.88M provides solid 2.55x coverage of current liabilities 271.28M, showing strong operational health.

Bear case

  • Operating cash flow of 690.88M barely covers its investment activities of (218.89M), with a coverage ratio of -3.16, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (218.89M) provide weak support for R&D spending of 783.14M, which is -0.28x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 690.88M shows concerning coverage of stock compensation expenses of 343.18M, with a 2.01 ratio indicating potential earnings quality issues.
  • Operating cash flow of 690.88M provides minimal -670.10x coverage of tax expenses of (1.03M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Retained earnings of (671.12M) provide limited buffer against comprehensive income items of 4.36M, which is -153.78x, indicating elevated exposure to market risks.

Geographical Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 3,658.84 Bn 27.68 9.08 59.29 Bn
2 META Meta Platforms, Inc. 1,611.77 Bn 26.66 8.02 83.90 Bn
3 SPOT Spotify Technology S.A. 95.06 Bn 36.53 4.70 2.22 Bn
4 BIDU Baidu, Inc. 53.09 Bn 42.00 2.90 13.66 Bn
5 NBIS Nebius Group N.V. 27.43 Bn 269.75 51.78 4.89 Bn
6 RDDT Reddit, Inc. 25.97 Bn 49.02 11.79 0.02 Bn
7 TME Tencent Music Entertainment Group 23.51 Bn 15.03 5.28 0.54 Bn
8 BILI Bilibili Inc. 12.86 Bn 118.92 3.08 1.36 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 7.74 0.89
EV to Cash from Ops. EV/CFO 36.31 -2.77
EV to Debt EV to Debt 1,080.50 30.99
EV to EBIT EV/EBIT 47.44 2.55
EV to EBITDA EV/EBITDA 54.04 4.60
EV to Free Cash Flow [EV/FCF] EV/FCF 36.66 15.68
EV to Market Cap EV to Market Cap 0.97 1.23
EV to Revenue EV/Rev 11.39 63.03
Price to Book Value [P/B] P/B 8.87 1.29
Price to Earnings [P/E] P/E 49.02 17.11
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.66
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.48
Interest Coverage Interest Coverage 0.00 -209.50
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -7.33 -31.77
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 69.65 187.77
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 209.38 -1.13
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 185.82 -497.28
EBIT Growth (1y) % EBIT 1y % (Qtr) 208.96 20.22
EBT Growth (1y) % EBT 1y % (Qtr) 208.96 -38.13
EPS Growth (1y) % EPS 1y % (Qtr) 185.29 -32.36
FCF Growth (1y) % FCF 1y % (Qtr) 217.01 25.84
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 70.68 22.57
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 3.52 1.45
Current Ratio Curr Ratio (Qtr) 11.56 3.29
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 -0.34
Interest Cover Ratio Interest Cover Ratio 0.00 -209.50
Times Interest Earned Times Interest Earned 0.00 -209.50
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.00 -4,353.96
EBIT Margin % EBIT Margin % (Qtr) 24.00 -4,865.94
EBT Margin % EBT Margin % (Qtr) 24.00 -5,084.75
Gross Margin % Gross Margin % (Qtr) 91.20 58.51
Net Profit Margin % Net Margin % (Qtr) 24.10 -5,086.49