QualityDipJC
Jim CramerOct 15 · TV
bullish“I want to buy Reddit. I think the stock is inexpensive.”
Stocks / Technology · IT services
RDDT
Reddit RDDT
$91.73−29.22% dayFri Oct 30 close
Deep dip with a setup armed: a close above $101.98 triggers it. 65% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $183.11+100%
- Market Value
- forming
- Off 52-wk high
- −65%
- Risk vs market
- Highbeta 2.26
5 bullish · 1 bearish See why
Fair value est.TriggerStopDrag across the chart to see any day
Key levels
Every level vs today’s $91.73
- Stopreference, not an order$89.28−2.7%
- PriceFri Oct 30 close$91.73you are here
- 52-wk lowlowest close, 1 year$91.73at the price
- Triggerclose above fires the setup$101.98+11.2%
- Fair value est.base case$183.11+99.6%
- 52-wk highhighest close, 1 year$258.93+182.3%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 15.0% ±2 points. Bear = 10.5% and 13.0%; bull = 8.5% and 17.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
$183.11+100% vs price
Price $91.73
Bear$140.53
Base$183.11
Bull$245.32
Price is below even the bear case.
What the price implies To be worth today’s price, RDDT’s free cash flow would need to grow about 3% a year for five years; our estimate uses 15%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much RDDT moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
High
Swings much more than the market, and its own price swings are 5.9× the S&P 500’s.
- Beta vs S&P 500
- 2.26
- Volatility
- 76% vs 13% SPY
- Correlation SPY
- 0.38
- Correlation QQQ
- 0.37
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $183.11, 100% above the price.
GrowthSales grew 62% to $3.1B over the last 12 months vs the 12 months before (SEC filings).
ProfitabilityOperating margin widened to 20.1% in FY2025 from −17.4% in FY2023 (SEC filings).
GrowthSales compounded 49% a year from FY2022 to FY2025.
TechnicalA company that passes our quality screen, now 65% off its 52-week high (deep dip).
Top bearish points 1 of 5
RiskSwings hard: beta 2.26 vs the S&P 500 and 76% yearly volatility (SPY 13%).
Who’s talking about it
Notable investors, executives, analysts and public figures on Reddit in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in IT services
CompanyPrice1 yearvs fair valueP/EMkt cap
VRSKVerisk Analytics$196.30+2.9%−10%−15%30.0×$25BIOTSamsara$42.07+1.0%+9%−68%274.3×$24BVRSNVeriSign$307.21+0.4%+30%−34%32.7×$27BCTSHCognizant Technology Solutions$65.11+4.1%−10%+28%11.4×$28BWITWipro$2.16+2.4%−19%−2%16.1×$21BTOSTToast$31.68+0.6%−8%−5%38.5×$18BAll fundamentals
P/E 18.7 · FCF yield 6.5% · ROE 32%
Valuation
- P/E
- 18.7×Technology median 33.9×
- Price / FCF
- 15.5×
- FCF yield
- 6.5%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 5.99×
- Price / book
- 5.17×
- Market cap
- $18.5Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $3.1B
- Sales growth, 12 months
- +62.2%vs the 12 months before
- Sales growth, 3 yrs
- +48.9%/yrfrom FY2022
- Diluted EPS, 12 months
- $4.90
- EPS growth, last FY
- n/afewer than two years of diluted EPS
- Net income, 12 months
- $992M
- Net income growth
- +184%12 months vs before
Profitability
- Gross margin
- 91.5%
- Operating margin
- 29.4%
- Net margin
- 32.1%
- FCF margin
- 38.8%
- Return on equity
- 32%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $3.0B
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $1.2B
- FCF growth, 12 months
- +135%
- Dividend yield
- 0%
- Payout ratio
- n/anot reported in its SEC filings
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- −0.4%diluted shares vs a year ago
- Stock-based comp
- $386M
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Reddit’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $183.11 · FCF value $110.52
Market ValueForming: thesis-changing filing on Oct 29, needs five trading days
forming
Fair value estimateDCF: ten years of free cash flow per share, discounted
$183.11100% upside
Assumes 15.0% growth for 5 years (revenue grew 48.9% a year FY22–FY25; capped at 15%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $5.94 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 30, 2026.
FCF valuePrice at a 4% yield on trailing free cash flow ($1.2B)
$110.52price −17%
Setup & signals
Armed · trigger $101.98
TriggerFires on a close above this
$101.98+11.2% from here
StopUnder the Oct 30 panic low
$89.28−2.7% from here
Risk if it triggersTrigger to stop
−12.5%
Momentum & 52-week range
RSI 18 · 5 days −36.4%
$91.73now
52-wk low $91.73high $258.93
Off 52-wk high−64.6%
5 days−36.4%
vs 50-day avg−39.0%
vs 200-day avg−42.4%
RSI (14)18 oversold
Market cap$25B
The business
FCF $1.2B · Sales +61%
- Free cash flow, 12 months$1.2B
- Free-cash-flow yield4.8%
- Free-cash-flow margin39%
- Gross margin92%
- Operating margin29%
- Return on invested capital22%
- Return on equity34%
- Sales growth (latest quarter vs year-ago quarter)+61%
- Net debt / EBITDA−1.6×
Investor buzz
1 from investors
Their view, not ours, and not advice. All buzz
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when RDDT fires a reversal signal
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