Alphabet's Google on Monday expanded its partnership with Reddit amid concerns that the social media platform's user growth relies heavily on traffic from Google Search.
I'm excited about Reddit's potential because it's growing revenue at 40% y/y while maintaining a debt-free balance sheet. At 35x forward free cash flow, Reddit looks like a bargain considering its projected 85% free cash flow growth. Despite competition from AI-driven search tools, Reddit's user engagement and community trust remain strong drivers of its success.
The recent market correction has brought on significant investor pain. With the market suffering the worst one-day drop since 2022 on March 10, buying may be the last thing some investors want to do.
Reddit shares are down 40%, presenting a fantastic buying opportunity for long-term value investors due to its high-quality business characteristics. Reddit boasts explosive growth, immense brand equity, strong network effects, minimal marketing needs, and low CAPEX, making the business highly scalable and profitable. Free cash flow for 2027 is projected at $900 -1,200 million, suggesting a che...
Reddit stock is down over 41% over the past month, and I think the stock is attractive at current levels. I'm optimistic about the company's international expansion and focus on making the product better. Management has been laser-focused on monetization, and paywalls for subreddits are soon to come.
Since reporting its fourth-quarter earnings in mid-February, Reddit Inc. (NYSE: RDDT) stock has dropped 36% in less than a month.
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