https://i.redd.it/pkhk27ow6gyh1.png
This is the largest YOLO play I've ever made. Figured you degenerates would enjoy seeing it deep in the red, and potentially get to cheer as it gets even worse after earnings tonight. Or, if RDDT pops, you can give me the big "fuck you"!
I've posted plenty of DD on RDDT over the past several months, but here's the short version:
- Revenue growth: 61% YoY, with 91% gross margins.
- EPS growth: 178% YoY, with substantial operating leverage.
- Advertiser growth: 70%+ YoY, driving 40% higher ad prices.
- User growth: 18% global DAU growth, despite everyone obsessing over 1% U.S. logged-in DAU growth.
- Reddit Max: AI-powered ad optimization is making existing ad inventory more valuable.
- Valuation: Around 21x estimated 2026 earnings, despite analysts projecting roughly 30%+ annual growth over the next several years (and analysts have been \dramatically\ under estimating Reddit's growth since its IPO).
- Balance sheet: Approximately $2.8B in cash, essentially no debt.
Meanwhile, the stock is down over 50% from its highs and nearly 18% in the last seven trading sessions, with no material negative operating news that I've found.
My thesis: Reddit doesn't even need extraordinary growth to justify this valuation anymore. But I think it's going to deliver extraordinary growth anyway.
Earnings tonight. Either I look like a genius or you guys get some premium loss porn. Posting it now so I can't hide from the results later!