RDDT 全部观点

All right, number four on our list, Reddit. What do you like about Reddit today? Reddit stock down 45% from its all-time high. What is so interesting here is the growth narrative.

I mean, we're at two years of 60% or greater quarterly revenue growth. And as I continue to look at the trends from the business perspective, you know, this is a company that is increasing in its user base still at a very healthy rate.

So, daily users up 18% in the most recent quarter. What's so interesting here is that you know a billion new posts were in the most recent quarter. That is 4% of all the material that you can find on Reddit was created in the last 3 months.

So the engagement is still very strong and management pointing out that it recently made some changes. It is now it now had a 50% improvement in new user retention. A 50% improvement in retention.

I think that really bodess well bearing out in the numbers here. So advertisers increasingly comfortable with the Reddit platform. It the management team is kind of talking about it like Pinterest.

Like there's high intent for making a purchase on Reddit. So that makes it a little bit more favorable to advertisers, but the ad revenue in the most recent quarter up 64% year-over-year as you push that out over the the whole year.

Still expecting really good growth. And you know, the profits are growing faster than revenue. Pick your metric. free cash flow, operating cash flow, net income, all of these more than doubled year-over-year in the most recent quarter.

The next stock I want to talk about is Reddit. Now, Reddit, not quite as much volume, right? about one fifth or so of the average volume compared to the last 30 days, but is a stock that's coming down.

And the reason why I really wanted to highlight this is because similar to some of these other stocks, we're potentially coming down and breaking some up sloping trend lines or attempting to, right?

Reddit had a good sell, right? It it fell over here at the end of July. um about 24% off of poor earnings had a nice recovery and just like I said on Tesla right looked to retrace and actually went green and what did I say after filling a massive gap like that expect a multi-day sell 1 2 3 4 day sell down 19%

Now, Reddit, why is it undervalued to me? Reddit right now is a company worth around $29 billion, has a trailing PE of 35.6 times, but a forward one of 21.3 times.

Year-to-date, the stock is down 36.7%, and over the past 12 months, the stock is down 30.4%. Now, Reddit, while you might only look at the stock and say, "Oh, the company is definitely not doing well."

Well, actually, the it's the contrary. The company has grown revenue by over 60% for the last X quarters, so the growth is definitely there. The market is still expecting this company to grow quite rapidly over the foreseeable future.

and I believe you're pretty heavily invested in Mata Libre, Amazon, but but also Reddit and some other names, too.

we record this when basically Amazon and also Reddit just reported earnings

Yeah, I think there might be a couple more percentages after today's earnings, but still. And you know, another company that just reported earnings and it's quite volatile is Reddit.

It's one of the few companies where we actually took some profits when we felt like the stock had risen too much. And I got to say, our timing there has been quite good. You initially pitched the stock at about $85 per share.

And if it wasn't for me, I got to take that one. You probably would have made it a larger position than just 2% of the portfolio at the time. Nowadays, it is a much larger position.

Unfortunately, I was never a user, so I just needed a bit more time to be convinced by the investment case. Long story short, 4 months after we bought the stock, it was up already 140% and we decided to take some profits off the table at that price.

Now, next up we have Reddit, a website that everyone in the world is familiar with. It's been around for seemingly ever, but the interesting thing about Reddit is as old as it is, it economically seems like a young company.

When we look at Reddit, it looks like it just started in 2020. The revenue was only $93 million. That's not a lot for one of the biggest websites in the world, but that's actually just when they went public.

And it seems like Reddit really started to monetize right after going public. In 2020, the revenue started to grow dramatically, almost doubling in a single year, continuing to double, going up to $500 million in a trailing 12-month period only in 2 years.

Have I ever looked at Reddit? No. Let's do this. This will be fun. Let's uh let's see this. I've never even looked at it. Um let's take a look. Um, so first things first, right?

Let's just pull up the financials income statement. Revenue is growing nicely. 2.2 billion up. Wow. 70% 60%. Revenue is growing and it's is growing at an accelerating rate. That is that is really interesting. um gross profits a digital company but 90% gross profit.

Okay, thank you for that R&D. So they made $2 billion last year fiscal year December. So we've got another three four months, excuse me, another six months before we get another result.

They made $2 billion of gross profit R&D relatively. Well, that's growing. Yeah, they spent $780 million in R&D sing. This what you want. This is this is where management takes their they takes their cut.

You want to see how much of that cut they're they're taking. So, five six years ago. Oop, sorry, that's that's SGNA. This is this is management here. So, six years ago, managers was running this business on $43 million of comp.

Now, that comp is $230 million. That's what 8x growth rate in management comp in six years. That's very high. But then again, their business, the revenue went 10x up from 200 million to 2.2 billion.

So, got to give credit where where it's due. That's phenomenal scaling. Go for it, guys. Take take the cash. Uh selling and marketing expense. So, now they're paying Hang on a second.

Let's see what that what that looks like. Uh pull up a calculator and let's just take a look and see. So, they're paid last year. selling expense was here right here 500 million 500 divided by 22000 they spent 22% of their revenue on marketing we'll [clears throat] go back four years 4 years uh it was 222 divided by 666 great number all right uh not great number was a weird number uh 33% so they're spending less as a percentage of revenue revenue on sales and marketing expense.

Even though this number is going up, it's less of a percent of revenue. Okay, I buy that. And they made [clears throat] money. They made money for the first time. They were unable to make money the last, I guess, as far back as this data goes, they finally made money. 442 million.

It's a decent margin. What is that? 442 / 2200 20%. 20% operating income margin that's actually be higher than that. Even that's 450 uh 45720%. I guess they have little depreciation.

Interesting. Kind of neat company. I don't know how defensible though it is. like how do you think about their positioning in the market, right? What what else can they do? Is it is it add revenue?

How do they how do they grow their how are they growing?