Financial Comparison: Reddit (RDDT) versus Its Rivals

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

Profitability

This table compares Reddit and its peers’ 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%

Valuation & Earnings

This table compares Reddit and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-21.78
Reddit Competitors	$5.51 billion	$11.45 million	-9.53

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

Institutional and Insider Ownership

46.1% of shares of all “Data processing & preparation” companies are held by institutional investors. 20.2% of shares of all “Data processing & preparation” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Reddit and its peers, 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	4641	6204	161	2.48

Reddit presently has a consensus target price of $175.95, suggesting a potential upside of 4.49%. As a group, “Data processing & preparation” companies have a potential upside of 15.72%. Given Reddit’s peers higher probable upside, analysts clearly believe Reddit has less favorable growth aspects than its peers.

Summary

Reddit peers beat Reddit on 8 of the 12 factors compared.

Reddit Company Profile

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.