Head-To-Head Analysis: Reddit (RDDT) and Its Rivals

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

Insider & Institutional Ownership

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	1	9	11	1	2.55
Reddit Competitors	878	4653	6222	164	2.48

Reddit currently has a consensus price target of $173.45, suggesting a potential upside of 35.81%. As a group, “Data processing & preparation” companies have a potential upside of 22.08%. Given Reddit’s stronger consensus rating and higher probable upside, analysts plainly believe Reddit is more favorable than its peers.

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Reddit	$1.30 billion	-$484.28 million	-16.52
Reddit Competitors	$5.51 billion	$11.45 million	-11.12

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.

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%

Summary

Reddit peers beat Reddit on 7 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.