Reddit, Inc. (NYSE: RDDT)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001713445
Market Cap 32.18 Bn
P/B 12.33
P/E 92.16
P/S 16.90
ROIC (Qtr) 10.56
Div Yield % 0.00
Rev 1y % (Qtr) 67.91
Total Debt (Qtr) 25.03 Mn
Debt/Equity (Qtr) 0.01

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 514.07M provides robust 20.53x coverage of total debt 25.03M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 911.65M provide 132.66x coverage of short-term debt 6.87M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 2.82B provides 112.50x coverage of total debt 25.03M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 509.68M exceeds capital expenditure of 4.38M by 116.26x, indicating strong organic growth funding capability.
  • Operating cash flow of 514.07M provides solid 2.25x coverage of current liabilities 228.32M, showing strong operational health.

Bear case

  • Operating cash flow of 514.07M barely covers its investment activities of (56.16M), with a coverage ratio of -9.15, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (56.16M) provide weak support for R&D spending of 772.90M, which is -0.07x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 514.07M shows concerning coverage of stock compensation expenses of 343.12M, with a 1.50 ratio indicating potential earnings quality issues.
  • Operating cash flow of 514.07M provides minimal -97.08x coverage of tax expenses of (5.29M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Retained earnings of (922.72M) provide limited buffer against comprehensive income items of 3.81M, which is -242.06x, indicating elevated exposure to market risks.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

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. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 10.94 1.10
EV to Cash from Ops. EV/CFO 61.22 -3.08
EV to Debt EV to Debt 1,257.09 28.98
EV to EBIT EV/EBIT 91.52 -26.54
EV to EBITDA EV/EBITDA 110.98 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 61.74 -67.01
EV to Market Cap EV to Market Cap 0.98 0.90
EV to Revenue EV/Rev 16.52 61.25
Price to Book Value [P/B] P/B 12.33 1.56
Price to Earnings [P/E] P/E 92.16 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Interest Coverage 0.00 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 56.20 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 76.71 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 165.05 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 148.07 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 164.19 32.66
EBT Growth (1y) % EBT 1y % (Qtr) 164.19 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) 129.46 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) 387.13 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 73.45 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 3.99 1.54
Current Ratio Curr Ratio (Qtr) 12.13 3.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 -0.39
Interest Cover Ratio Interest Cover Ratio 0.00 -202.56
Times Interest Earned Times Interest Earned 0.00 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.10 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) 18.05 -4,786.62
EBT Margin % EBT Margin % (Qtr) 18.05 -5,002.12
Gross Margin % Gross Margin % (Qtr) 91.20 58.65
Net Profit Margin % Net Margin % (Qtr) 18.30 -5,003.08