Reddit (NYSE:RDDT) and Hello Group (NASDAQ:MOMO) Financial Review

Hello Group (NASDAQ:MOMO) and Reddit (NYSE:RDDT) are both communication services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Hello Group and Reddit”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hello Group	$1.48 billion	0.39	$114.97 million	$0.64	8.50
Reddit	$2.20 billion	12.60	$529.72 million	$4.30	33.55

Reddit has higher revenue and earnings than Hello Group. Hello Group is trading at a lower price-to-earnings ratio than Reddit, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Hello Group and Reddit, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hello Group	1	1	1	0	2.00
Reddit	0	11	18	2	2.71

Hello Group currently has a consensus target price of $9.05, indicating a potential upside of 66.36%. Reddit has a consensus target price of $221.10, indicating a potential upside of 53.28%. Given Hello Group’s higher probable upside, research analysts plainly believe Hello Group is more favorable than Reddit.

Profitability

This table compares Hello Group and Reddit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hello Group	7.27%	7.04%	5.39%
Reddit	31.35%	29.02%	26.32%

Insider & Institutional Ownership

51.0% of Hello Group shares are owned by institutional investors. 61.4% of Hello Group shares are owned by insiders. Comparatively, 28.5% of Reddit shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Hello Group has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Reddit has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500.

Summary

Reddit beats Hello Group on 12 of the 15 factors compared between the two stocks.

About Hello Group

Hello Group Inc. provides mobile-based social and entertainment services in the People's Republic of China. It operates in three segments: Momo, Tantan, and QOOL. The company offers Momo, a mobile application that connects people and facilitates social interactions based on location, interests, and various online recreational activities, including live talent shows, short videos, social games, as well as other video- and audio-based interactive experiences, such as online parties, mobile karaoke and user participated reality shows; Tantan, a social and dating application; and other applications under the Hertz, Soulchill, Duidui, and Tietie names. The company also provides livestream services for various content and activities comprising talent shows, such as singing, dancing, and talk shows, as well as casual chatting, and other forms of interactions between broadcasters and viewers; value-added services; advertising and marketing services; and mobile games. The company was formerly known as Momo Inc. and changed its name to Hello Group Inc. in August 2021. Hello Group Inc. was incorporated in 2011 and is headquartered in Beijing, the People's Republic of China.

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.