Reddit is set to release its Q1 2025 earnings with an estimated EPS of $0.03 and projected revenue of $369.68 million.
The company anticipates a significant year-over-year revenue increase of 48% to 52%, outpacing the Zacks Consensus Estimate.
Reddit, trading under the symbol (NYSE:RDDT), is a prominent social media platform known for its diverse user-generated content. As a key player in the digital advertising space, Reddit competes with giants like Meta and Snap. The company is set to release its first-quarter 2025 earnings on May 1, with analysts estimating an earnings per share (EPS) of $0.03 and projected revenue of $369.68 million.
Reddit anticipates revenues between $360 million and $370 million, marking a significant year-over-year increase of 48% to 52%. The Zacks Consensus Estimate is slightly higher at $372.09 million, suggesting a 53.15% increase from the previous year. This growth reflects Reddit’s strong performance in digital advertising, a crucial indicator of consumer sentiment.
Reddit has consistently exceeded the Zacks Consensus Estimate in the last four quarters, with an average surprise of 194.08%. This indicates that the company has been performing better than expected, despite its current unprofitability. The earnings per share are expected to be 3 cents, which has risen by a penny over the past month.
Reddit’s financial metrics reveal a mixed picture. The price-to-sales ratio stands at about 15.24, suggesting that investors are willing to pay $15.24 for every dollar of sales. The enterprise value to sales ratio is slightly lower at 14.83, indicating a relatively high valuation. The enterprise value to operating cash flow ratio is around 86.82, suggesting a high valuation compared to its cash flow.
The company’s debt-to-equity ratio is quite low at about 0.013, indicating minimal reliance on debt financing. Additionally, the current ratio is strong at approximately 12.63, suggesting that Reddit has a robust ability to cover its short-term liabilities with its short-term assets. Despite these strengths, Reddit faces challenges from rising competition and a premium valuation, which could make it a risky investment ahead of the earnings announcement.
