It means investors as a whole are willing to pay 21 dollars for every dollar of Reddits annual earnings.
Reddit is still increasing it’s yearly profit by about 50%, which is a lot. Reddit stock p/e was above 50 because investors were more confident in the stock price continuing to rocket up.
Now investors are concerned about stalling user growth, decreased user engagement, Google’s AI search results cannibalizing ad views, and reddit requiring login.
If you think that Reddit will continue making money about the same as they have been, then 21 means that the stock is a bargain, and you should buy it.
If you think that Reddit’s revenues are going to drop in a way that is not reflected in the current accounting statements, then the P/E is not an accurate measure of value, and you should stay away.
21 is not a bargain, look at bank stocks if you think a 21 p/e at stable income is a bargain.
The US stock exchange is completely inflated, but the inflation keeps new money from across the globe flowing back. As the 7% annualised gains in S&P500 are among the top of the world, but the entire growth is based on a perception people will continue to flow money into the ponzi scheme rather than underlying value.
Novo Nordisk, trades at 9.78 P/E. That’s a stable profit stock.
Barclay’s, trades at a 8.32 P/E. That’s a stable profit stock.
American stocks are just inflated through the fucking roof.
A decade, and more, ago it was taught that a company with a P/E under 15, with a few other fundamentals checked, was a good investment for a growth stage company. When that P/E went above 40 it was time to evaluate if selling is needed because the stock is over valued and due for a correction.
A decade, and more, ago it was taught that a company with a P/E under 15, with a few other fundamentals checked, was a good investment for a growth stage company.
What? No. It was a good investment for a stable blue chip company.
Growth stocks are always going to be on the high end. 30-50 p/e is very normal, especially with a bullish sentiment behind a growing company. 100 p/e wasn’t outrageous if a company was growing rapidly.
What’s surreal about firms like Tesla is that they’re already functionally blue chip. They’ve done their growth phase and largely saturated their markets. But they value as though people anticipate Tesla to eclipse Toyota in the next twenty years, absent any evidence to that effect.
None of that matters anymore.
There are a few outlier firms outperforming the pack - the MAG7, specifically - that are trying to claim growth stock status on the grounds that tech infrastructure consumption is preparing to increase rapidly.
Not really, no
Explain it to me like I have not money invested in anything other than real physical property.
$17B can buy many peanuts
How many reddits is tha?
One reddit of money.
It’s a whole lot of Reddit Gold, I’ll tell you that much
It means investors as a whole are willing to pay 21 dollars for every dollar of Reddits annual earnings.
Reddit is still increasing it’s yearly profit by about 50%, which is a lot. Reddit stock p/e was above 50 because investors were more confident in the stock price continuing to rocket up.
Now investors are concerned about stalling user growth, decreased user engagement, Google’s AI search results cannibalizing ad views, and reddit requiring login.
If you think that Reddit will continue making money about the same as they have been, then 21 means that the stock is a bargain, and you should buy it.
If you think that Reddit’s revenues are going to drop in a way that is not reflected in the current accounting statements, then the P/E is not an accurate measure of value, and you should stay away.
21 is not a bargain, look at bank stocks if you think a 21 p/e at stable income is a bargain.
The US stock exchange is completely inflated, but the inflation keeps new money from across the globe flowing back. As the 7% annualised gains in S&P500 are among the top of the world, but the entire growth is based on a perception people will continue to flow money into the ponzi scheme rather than underlying value.
Novo Nordisk, trades at 9.78 P/E. That’s a stable profit stock.
Barclay’s, trades at a 8.32 P/E. That’s a stable profit stock.
American stocks are just inflated through the fucking roof.
Wait Reddit is profitable? Since when? Is it all AI money?
Since they started scraping user data and selling ads
Stock fundamentals mean nothing nowadays. Tesla at one point had a P/E ratio around 300, and it just kept getting worse.
They’re currently at 433.
But the S&P 500 average is around 23-26. Historically, in the 16-20 ballpark.
Reddit is fairly valued, even if it’s administered by a bunch of assholes.
That’s what I mean by worse.
A decade, and more, ago it was taught that a company with a P/E under 15, with a few other fundamentals checked, was a good investment for a growth stage company. When that P/E went above 40 it was time to evaluate if selling is needed because the stock is over valued and due for a correction.
None of that matters anymore.
What? No. It was a good investment for a stable blue chip company.
Growth stocks are always going to be on the high end. 30-50 p/e is very normal, especially with a bullish sentiment behind a growing company. 100 p/e wasn’t outrageous if a company was growing rapidly.
What’s surreal about firms like Tesla is that they’re already functionally blue chip. They’ve done their growth phase and largely saturated their markets. But they value as though people anticipate Tesla to eclipse Toyota in the next twenty years, absent any evidence to that effect.
There are a few outlier firms outperforming the pack - the MAG7, specifically - that are trying to claim growth stock status on the grounds that tech infrastructure consumption is preparing to increase rapidly.
Whether that pans out remains to be seen.
It’s even worse - last time I checked Tesla had the market cap of the top-15 Auto OEMs.
This would mean Tesla’s enterprise value implied it would be a bigger more profitable business than the entire automotive market