Core Insights - Reddit is a highly visited platform with targeted advertising opportunities through its subreddits, allowing advertisers to reach specific user interests without cookie tracking [1] - The company has experienced significant growth, with its stock price increasing over 260% in the past year, leading to a market capitalization of $45 billion [2] Financial Performance - Reddit's revenue for the most recent quarter ending June 30 rose by 78% to $500 million, while daily active unique visitors increased by 21% to 110.4 million [4] - The gross profit margin was nearly 91%, resulting in a solid profit margin of around 18% [4] Valuation Concerns - Despite strong fundamentals, Reddit's stock trades at a high price-to-earnings (P/E) multiple of over 100, which is significantly higher than competitors like Meta Platforms and Pinterest, trading at multiples of 27 and 12 respectively [6][7] - The high P/E ratio raises concerns about potential downside risks, with analysts suggesting a price target of around $202, indicating a possible downside of 17% from current trading levels [8]
Up Over 260% in the Past Year, Is It Too Late to Buy Reddit Stock?