Reddit, Inc.
$169.42
-4.6%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. Reddit, Inc. operates as a subsidiary of Advance Publications, Inc.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is elevated (P/E 59.6).
Valuation inputs: P/E 59.6, earnings yield +1.7%, momentum -4.6%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is strong (ROE +18.1%, ROIC +14.9%).
Profitability stack: net margin +24.1%, ROE +18.1%, ROIC +14.9%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile looks controlled across current risk inputs.
Risk factors: liabilities/assets +9.6%, momentum -4.6%, net margin +24.1%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Reddit, Inc. Market vs Earnings Trajectory
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Reddit, Inc. Fair Value Envelope
Reddit, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Healthy operating margins demonstrate effective cost control and strong business fundamentals.
Net Profit Margin
Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.
Effective Tax Rate
Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.
Profitability Insight
Exceptional profitability across all levels: Strong pricing power, efficient operations, and healthy bottom line indicate a high-quality business with sustainable competitive advantages.
Reddit, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Moderate working capital outflow. Typical for growing businesses, but ensure it's supporting revenue growth, not inefficiency.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
Reddit, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Conservative capital structure. The company relies primarily on equity financing, indicating low financial risk.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Asset-light business model with high liquidity. Majority of assets are easily convertible to cash.
Financial Health Insight
Strong financial foundation: Excellent liquidity combined with conservative leverage suggests the company is well-positioned to weather economic uncertainties and fund growth opportunities.
Reddit, Inc. Street Expectations Map
Wall Street analysts project that RDDT stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 228.11, with estimates ranging from a low of 110.00 to a high of 325.00.
The consensus 1-year price target stands at 228.11, with estimates ranging from a low of 110.00 to a high of 325.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
High uncertainty. Very wide target spread indicates significant disagreement among analysts—major valuation uncertainty or transformation underway.
Risk-Reward Profile
Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.
Analyst Conviction
High uncertainty: Wide dispersion indicates analysts struggle to agree on valuation—proceed with caution and independent analysis.
Market Sentiment Insight
High risk, high reward: Substantial upside potential exists, but wide analyst disagreement signals execution risk or unclear catalysts. Thorough due diligence essential before committing capital.
Reddit, Inc. Insider Positioning
During the last 12 months, insiders have purchased $5.97M and sold $23.56M worth of RDDT shares, resulting in $17.59M of net selling activity.
3 Months
0
0.00
36.7K
5.20M
-5.2M
-$5.20M
3-6 Months
40.4K
5.97M
56.9K
11.94M
-6.0M
-$5.97M
6-9 Months
0
0.00
10.8K
2.25M
-2.2M
-$2.25M
9-12 Months
0
0.00
28.4K
4.18M
-4.2M
-$4.18M
Top Buyers
Farrell Sarah E
Director
$5.97M
Top Sellers
Huffman Steve Ladd
Director, 10 Percent Owner, Officer: Ceo & President
$6.87M
Lee Benjamin Seong
Officer: Chief Legal Officer
$5.86M
Wong Jennifer L.
Officer: Chief Operating Officer
$5.28M
Slowe Christopher Brian
Officer: Chief Technology Officer
$2.94M
Reynolds Michelle Marie
Officer: Chief Accounting Officer
$1.88M
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $17.59M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Weak buy/sell ratio. Selling significantly exceeds buying—monitor for potential fundamental concerns.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
5 insider sellers vs. 1 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
No Dividend Yield Data
RDDT has not reported any dividend yield values in the available annual periods.
rddt Dividend History
Learning Layer
Related Guides
Build conviction on RDDT by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.