Should you buy Reddit stock? (March 2024)

Published first at https://www.3minutebreakdowns.com Reddit stock analysis. Ticker: $RDDT Reddit joined the public markets last week under the ticker symbol RDDT. At $46 a share, the company is being valued at 8.7 billion dollars. With $1.5 billion of cash the enterprise value is around 7.2 billion. Documents filed with the SEC show that Reddit grew revenues 21% last year to 804 million and the number of daily active users increased 27% to 73.1 million. That’s excellent growth, however, the company is still not profitable. Net income, adjusted ebitda and free cash flow are all negative over the last 12 months. When compared to other social media stocks like Pinterest and Snap, Reddit’s valuation looks reasonable. The company is more expensive compared to sales but it does report higher revenue per user, higher gross margins, and faster growth. And management says the company is still in the early stages of monetization. Revenues should increase as the company scales its advertising model and explores new revenue streams. One of those streams includes licensing its data for the training of large language models like Gemini and ChatGPT. If Reddit continues this recent growth there’s a good chance that it closes the valuation gap with its peers. #investing #stocks #redditstock #3mb