Reviewing Reddit (RDDT) and Its Peers

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

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%

Insider & Institutional 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 company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Reddit and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	1	9	11	1	2.55
Reddit Competitors	875	4638	6200	161	2.48

Reddit currently has a consensus target price of $175.95, suggesting a potential upside of 10.27%. As a group, “Data processing & preparation” companies have a potential upside of 16.89%. Given Reddit’s competitors higher possible upside, analysts clearly believe Reddit has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares Reddit and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-20.64
Reddit Competitors	$5.51 billion	$11.45 million	-8.35

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.

Summary

Reddit competitors beat Reddit on 8 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.