Business quality: stronger than mostValuation: in line with its sector
A stronger business than most communication services companies, priced about in line with them.
Reddit trades at 14.9 times the next 12 months of expected earnings, against a median of 14.8x for the 28 communication services stocks we cover. The quality score blends where it ranks on revenue growth, gross margin, operating margin and free-cash-flow margin (net margin for banks and insurers) over the last 12 months, from SEC filings.
- Revenue grew faster than the sector median: +62.2% vs +10.8%
- Keeps more of each sale (gross margin): 91.5% vs 60.9%
- More profitable (operating margin): 29.4% vs 18.6%
- Turns more of its sales into cash: 38.8% vs 9.0%