It often feels like it's President Donald Trump against the world right now -- although investors may feel it's more like Trump against the stock market.

On-and-off threats to impose 25% tariffs on imports from Mexico and Canada. On-and-on imposition of tariffs on China -- 10% at a time. Threats of "reciprocal" tariffs on every product, from every country in the world (at an equal amount to such country's tariffs on corresponding U.S. imports). All of the above have investors panicking that the president is pushing the economy into a recession.

Perhaps recalling that the average recession over the past 100 years has resulted in a nearly 40% drop in the stock market, many investors decided to get out while the getting is still good -- or at least better than it's going to get. Counting from the Nasdaq Composite's all-time high point of 20,173.89 reached on Dec. 16, the Nasdaq has dropped nearly 12% in just three months, as sellers head for the exits.

The good news? Some perfectly fine "babies" are getting tossed out with the bathwater in this market maelstrom. And that's revealed one unstoppable stock that's now trading at an incredible 50% discount.

Why Reddit stock dropped 38% in one month

Reddit (RDDT 6.48%) is its name, and social media is its game. It's been roughly one year since Reddit stock went public in a popular March 2024 initial public offering (IPO). Since that IPO, the stock roughly doubled in stock price, which sounds pretty great until you realize that at one point, roughly a month ago, Reddit stock had quadrupled in price.

It's the stock's 38% price discount over the past few weeks that makes Reddit stock worth buying today. Before we get to that, though, let's review why the stock began selling off even before the Nasdaq threw its fit over Trump's tariffs.

Reddit reported Q4 2024 earnings on Feb. 12, one full week before the Nasdaq started sinking. The good news is that:

• Daily users increased 39% to 102 million.
• Weekly users grew by 42% to 379 million.
• Revenue soared 71% year over year to $427.7 million.
• Free cash flow (FCF) flipped from negative to positive ($89 million).
• Earnings were $0.36 per share, well ahead of expectations.

The bad news is that Reddit forecast "only" 50% sales growth in Q1 2025, and hinted that revenue growth could slow further in the back half of this year after a recent change in how Alphabet's Google ranks sites on its search engine. Full-year revenue growth is expected to be about 39%, according to analysts polled by S&P Global Market Intelligence.

Reddit inquiry: How do I keep growing revenue?

The other good news is that Reddit is already taking steps to mitigate this risk. Last week, the company announced new tools to make posting on Reddit easier, and to help users "see how well their posts are doing [and] understand what works and improve their future posts," which could increase traffic on the site.

And beyond tools for users, Reddit is also implementing better tools for advertisers, permitting more advertising on comments pages, and potentially adding search advertising, according to a recent note from investment bank Loop Capital. Loop predicts these actions will attract more advertisers to Reddit, driving average revenue per user higher, and growing revenue overall.

At the same time, as an internet business trading primarily in electronic ones and zeros, all the hullabaloo about the Trump tariffs seems largely irrelevant to Reddit. While it's possible the company might get caught up in a trade war in some respect -- Europe raising taxes on foreign tech businesses, for example, or foreign regulation of speech on the internet -- tariffs per se seem a non-issue for Reddit.

Image source: Getty Images.

Is Reddit stock a buy at $130 a share?

Despite projecting slower revenue growth this year than other analysts (36%), Loop Capital believes Reddit stock is a buy and worth $210 a share -- 61% above Wednesday's closing share price of $130. I'm inclined to agree.

Currently valued at $23 billion, or $20.4 billion net of cash on its balance sheet, Reddit stock sells for 94 times its trailing free cash flow of $216 million. That will be very expensive if all Reddit is able to grow at is, say, the 36% that Loop projects for revenue growth this year. But the bank says Reddit's earnings before interest, taxes, depreciation, and amortization (EBITDA) are growing faster than revenue, and will grow 87% this year.

Free cash flow is growing even faster than that. In fact, most analysts polled are forecasting free cash flow of $523 million this year, representing 142% growth over 2024 FCF.

If they're right about this, it would mean Reddit is growing FCF four times faster than sales. And it would mean that at 39 times current year free cash flow, Reddit stock is actually a much bigger bargain than investors are giving it credit for right now.