Reddit (RDDT) versus Its Peers Critical Comparison

Reddit (NYSE:RDDT) is one of 151 public companies in the “Data processing & preparation” industry, but how does it contrast to its peers? We will compare Reddit to related companies based on the strength of its risk, institutional ownership, dividends, analyst recommendations, earnings, valuation 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	-159.17%	-1,792.47%	-8.87%

Insider & Institutional Ownership

45.4% of shares of all “Data processing & preparation” companies are held by institutional investors. 20.4% of shares of all “Data processing & preparation” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Reddit and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-24.24
Reddit Competitors	$938.77 million	$7.64 million	26.49

Reddit has higher revenue, but lower earnings than its peers. 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.

Analyst Recommendations

This is a summary of current ratings for Reddit and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	1	8	12	1	2.59
Reddit Competitors	869	4581	6141	156	2.48

Reddit currently has a consensus price target of $175.45, indicating a potential downside of 6.35%. As a group, “Data processing & preparation” companies have a potential upside of 5.40%. Given Reddit’s peers higher possible upside, analysts clearly believe Reddit has less favorable growth aspects than its peers.

Summary

Reddit beats its peers on 6 of the 11 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.