We feel now is a pretty good time to analyse Reddit, Inc.'s (NYSE:RDDT) business as it appears the company may be on the cusp of a considerable accomplishment. Reddit, Inc. operates a website that organizes digital communities. The company’s loss has recently broadened since it announced a US$91m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$537m, moving it further away from breakeven. The most pressing concern for investors is Reddit's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Reddit

Reddit is bordering on breakeven, according to the 19 American Interactive Media and Services analysts. They expect the company to post a final loss in 2024, before turning a profit of US$174m in 2025. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 56% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Reddit's growth isn’t the focus of this broad overview, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Reddit currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Reddit which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Reddit, take a look at Reddit's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Reddit worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Reddit is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Reddit’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.