Contrasting Reddit (RDDT) and Its Competitors

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

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 company is poised for long-term growth.

Profitability

This table compares Reddit and its rivals’ 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%

Analyst Ratings

This is a summary of recent recommendations and price targets for Reddit and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	2	9	11	1	2.48
Reddit Competitors	882	4663	6232	165	2.48

Reddit currently has a consensus target price of $162.68, indicating a potential upside of 49.70%. As a group, “Data processing & preparation” companies have a potential upside of 22.28%. Given Reddit’s stronger consensus rating and higher possible upside, analysts plainly believe Reddit is more favorable than its rivals.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-14.06
Reddit Competitors	$5.51 billion	$11.45 million	-12.48

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

Summary

Reddit rivals beat Reddit on 7 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.