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Reddit Inc
NYSE:RDDT

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Reddit Inc
NYSE:RDDT
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Price: 170.71 USD 4.27% Market Closed
Market Cap: 30B USD
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DCF Value

This DCF valuation model was created by Alpha Spread and was last updated on Dec 22, 2024.

Estimated DCF Value of one RDDT stock is 21.01 USD. Compared to the current market price of 170.71 USD, the stock is Overvalued by 88%.

RDDT DCF Value
Base Case
21.01 USD
Overvaluation 88%
DCF Value
Price
R
Worst Case
Base Case
Best Case
21.01
DCF Value
Worst Case
Base Case
Best Case
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DCF Value: 21.01 USD

Present Value Calculation

This block is the starting point of the DCF valuation process. It calculates the present value of a company's forecasted cash flows based on selected operating model. Adjust key parameters like discount rate and terminal growth, and alter inputs such as revenue growth and margins to see their impact on valuation.

DCF Model
Base Case Scenario

The present value of cash flows over the next 5 years amounts to 129.7m USD. The present value of the terminal value is 3.6B USD. The total present value equals 3.7B USD.
Forecast Period
Years
Discount Rate
%
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Terminal Growth
%
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DCF Value Calculation

This stage translates the present value into DCF value per share. For firm valuation models, it adjusts present value for debt and assets to derive equity value (skipped if using equity valuation model). Finally, this equity value is divided by the number of shares to determine the DCF value per share.

Present Value to DCF Value
Capital Structure

Present Value 3.7B USD
Equity Value 3.7B USD
/ Shares Outstanding 175.6m
RDDT DCF Value 21.01 USD
Overvalued by 88%

You are using the equity valuation model. In this approach, further calculations for converting firm value to equity value are not required. The present value, obtained in the present value calculation block, already represents the equity value.

The DCF value per share is derived by dividing the present value by the number of shares:

Present Value
3.7B USD
/
Number of Shares
175.6m
=
DCF Value
21.01 USD

Valuation Analysis

Sensitivity Analysis
DCF Value Sensitivity Analysis

Sensitivity Analysis assesses how changes in key factors like revenue growth, margin, and discount rate affect a stock's DCF value. By visualizing various scenarios, from significant downturns to optimistic growth, this tool helps you understand potential valuation shifts, aiding in risk assessment and strategic decision-making.

DCF Financials
Financials used in DCF Calculation

Revenue
1.3B 3.3B
Net Income
-765.7m 422.7m

See Also

Discover More

What is the DCF value of one RDDT stock?

Estimated DCF Value of one RDDT stock is 21.01 USD. Compared to the current market price of 170.71 USD, the stock is Overvalued by 88%.

The true DCF Value lies somewhere between the worst-case and best-case scenario values. This is because the future is not predetermined, and the stock's DCF Value is based almost entirely on the future of the company. Knowing the full range of possible stock DCF values gives a complete picture of the investment risks and opportunities.

How was the DCF Value calculated?

1. Present Value Calculation. Utilizing the DCF operating model, Reddit Inc's future cash flows are projected and then discounted using a chosen discount rate to determine its Present Value, which is calculated at 3.7B USD.

2. DCF Value Calculation. The company's capital structure is employed to derive the total Equity Value from the previously calculated Present Value of the cash flow. This Equity Value, when divided by the total number of outstanding shares, yields the DCF Value of 21.01 USD per share.

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