$RDDT

Explicit claim • strong conviction • basis: explicit term

On a pure valuation basis, Reddit is cheap. Okay, I've said it time and time again. Reddit is cheap.

Explicit claim • strong conviction • basis: fair value gap

That alone is enough to send the stock back up to maybe 185, even $200. Still conservative. That would be a conservative 35 times PE ratio and just 10 times price to sales. Now against this we do see analyst targets of $220 per share on average. That is the average of about 22 analysts covering the shares. That alone is a 56% upside here high to $300 per share. 113% upside by one analyst.

Explicit claim • strong conviction • basis: fair value gap

So, Reddit, even today after this news, is trading at a forward price to earnings ratio of 18.3. This is near the cheapest this stock has traded for several years now. So, the stock has been undervalued and under-appreciated. Investors are not flocking to this company. Investors hardly know about this company. So, inclusion in the S&P 500 index, that activity from buyers that would not be normally looking to buy Reddit stock is a significant positive for the company. So, another source of undervaluation when I look at the business using a discounted cash flow model, even after today's increase, the stock still looks undervalued. It's now trading at $177 per share. I calculated an intrinsic value of $203 per share.

Explicit claim • strong conviction • basis: multiple relative

And you're getting all that at a P/E of just 28 right now, which is disgustingly undervalued. I think Reddit is way over a $200 dollar stock.