Head to Head Contrast: Reddit (NYSE:RDDT) versus Teads (NASDAQ:TEAD)

Reddit (NYSE:RDDT) and Teads (NASDAQ:TEAD) are both communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Reddit and Teads, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reddit	0	10	17	2	2.72
Teads	1	2	1	0	2.00

Reddit currently has a consensus target price of $219.29, indicating a potential upside of 40.94%. Teads has a consensus target price of $1.00, indicating a potential upside of 149.94%. Given Teads’ higher possible upside, analysts plainly believe Teads is more favorable than Reddit.

Earnings & Valuation

This table compares Reddit and Teads”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reddit	$2.20 billion	13.59	$529.72 million	$4.30	36.18
Teads	$1.30 billion	0.03	-$517.07 million	($5.53)	-0.07

Reddit has higher revenue and earnings than Teads. Teads is trading at a lower price-to-earnings ratio than Reddit, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Reddit and Teads’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reddit	31.35%	29.02%	26.32%
Teads	-43.32%	-49.37%	-6.14%

Risk and Volatility

Reddit has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500. Comparatively, Teads has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.

Institutional and Insider Ownership

60.4% of Teads shares are owned by institutional investors. 28.5% of Reddit shares are owned by insiders. Comparatively, 12.0% of Teads shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Reddit beats Teads on 12 of the 14 factors compared between the two stocks.

About Reddit

Reddit, Inc. operates a website that organizes digital communities. It organizes communities based on specific interests that enable users to engage in conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another. The company was founded in 2005 and is headquartered in San Francisco, California.

About Teads

Outbrain Inc., together with its subsidiaries, operates an online content recommendation platform worldwide. It offers Outbrain Engage, a product suite for media partners that provides personalized feeds and data-driven recommendations, as well as a solution to maximize user engagement. The company’s Outbrain Engage solution also includes a web-based dashboard to manage and control various aspects of the platform, including content, formats, sources, frequency, and categories of ads delivered on their properties, as well as monetizes the content through customized data-driven advertising. It also provides Outbrain Amplify, a product suite for advertisers that provides an open web platform that helps users to connect with audiences on premium digital properties. The company’s Outbrain Amplify solution also provides advertisers with access to ad inventory that support various formats, including text and image, video, interactive carousel, app install, and other forms of direct response; and ads optimized for engagement. Outbrain Inc. was incorporated in 2006 and is headquartered in New York, New York.