Reddit, Inc. (NYSE:RDDT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. As path to profitability is the topic on Reddit's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Reddit

According to the 18 industry analysts covering Reddit, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$153m in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 72%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Reddit given that this is a high-level summary, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Reddit currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Reddit, so if you are interested in understanding the company at a deeper level, take a look at Reddit's company page on Simply Wall St. We've also put together a list of important aspects 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.