Why we don't show a single “fair value” for RDDT
A trailing-FCF DCF can't fairly anchor Reddit, Inc. right now — free cash flow has been negative in recent years. For a company in this position, trailing free cash flow understates what the business actually earns for owners, so any “fair value” built on it would be misleadingly low. Off today's cash-flow base, no plausible growth rate bridges to the current price — the market is valuing normalized future cash flows, not the depressed base. The model scenarios below are shown for reference only.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 12.5% | $10.57 |
| Base case | 18.0%/yr | 11.5% | $12.01 |
| Optimistic | 20.0%/yr | 10.5% | $13.62 |
Current Price
$149.38
Market-Implied Growth
N/A
Base-Case Model Value
$12.01
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for RDDT (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $65.5M · 0.19B shares · net cash $953.6M
Estimated Fair Value
$12.01
-92.0% vs $149.38
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $149.38; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $13.26 | $13.71 | $14.24 | $14.84 | $15.54 |
| 10.5% | $12.24 | $12.59 | $12.98 | $13.42 | $13.93 |
| 11.5% | $11.44 | $11.71 | $12.01 | $12.34 | $12.72 |
| 12.5% | $10.78 | $11.00 | $11.23 | $11.50 | $11.78 |
| 13.5% | $10.24 | $10.42 | $10.60 | $10.81 | $11.04 |
