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Reddit

RDDT
79
Internet Content & Information · Communication Services
Price
$181.29
-3.97 (-2.14%)
Market Cap
$34.90B
Winston Score
79
Winston is happy
A high-quality business with solid fundamentals.

Share count rising — dilution

+23.7% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 163.3M (2021) → 202.1M (2025)

Reddit is a social media website where people gather in topic-based communities called "subreddits" to share links, post content, and have discussions. It covers almost every topic imaginable — sports, science, gaming, news, and more — and its main users are everyday internet users looking for information, opinions, and entertainment. Reddit is one of the most visited websites in the world, consistently ranking among the top ten in the United States.

Reddit makes most of its money from digital advertising, where brands pay to show ads to its large and highly engaged audience. It also earns smaller amounts from data licensing — most notably a deal with Google to train AI models on Reddit's content — and from user subscriptions for a premium experience. Reddit operates primarily in English-speaking markets, though it is expanding internationally. Its main competitive advantage is its massive archive of authentic human conversations, which is increasingly valuable for AI training, but it faces the ongoing risk that younger users may prefer short-video platforms like TikTok over text-based discussion.

Winston Score History

Politician Trades

2 trades / 12mo

0 Congressional buys and 2 sells on RDDT in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+69.1% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+664.3% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$783M/ year

↓ Declining (-16% vs prior year)

35.6% of revenue

3.0x the sector average (12%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

11.7%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.4B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Reddit grew revenue 69% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin
91.5%
Premium pricing power — 91.5% gross margin
Operating Margin
27.6%
Excellent — 27.6% operating margin
ROCE
5.7%
Weak — 5.7% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+70.6%
Fast-growing sales (70.6% YoY)
EPS YoY
+485.3%
Earnings growing fast (485.3% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency
8/8 quarters
Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion
124%
Turns 124% of profit into real cash
FCF Margin
35.1%
Converts sales into free cash efficiently (35.1%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
0.01
Conservative — low debt load (0.01)
Interest Cover
100.00x
—
Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
48.5x
Expensive — P/E 48.5

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward
+27.8
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (48.5 → 20.7)

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Dividends

Not applicable for this business.
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