Contrasting Reddit (NYSE:RDDT) and JOYY (NASDAQ:JOYY)

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

Earnings & Valuation

This table compares JOYY and Reddit”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JOYY	$2.12 billion	1.76	$2.10 billion	$4.31	17.36
Reddit	$2.20 billion	13.56	$529.72 million	$4.30	36.09

JOYY has higher earnings, but lower revenue than Reddit. JOYY 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 JOYY and Reddit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JOYY	10.42%	3.67%	3.20%
Reddit	31.35%	29.02%	26.32%

Analyst Recommendations

This is a summary of current recommendations for JOYY and Reddit, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JOYY	0	2	2	0	2.50
Reddit	0	11	19	2	2.72

JOYY currently has a consensus price target of $74.67, indicating a potential downside of 0.19%. Reddit has a consensus price target of $220.90, indicating a potential upside of 42.36%. Given Reddit’s stronger consensus rating and higher possible upside, analysts plainly believe Reddit is more favorable than JOYY.

Insider and Institutional Ownership

36.8% of JOYY shares are held by institutional investors. 43.0% of JOYY shares are held by company insiders. Comparatively, 28.5% of Reddit shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

JOYY has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Reddit has a beta of 2.03, indicating that its stock price is 103% more volatile than the S&P 500.

Summary

Reddit beats JOYY on 11 of the 15 factors compared between the two stocks.

About JOYY

JOYY Inc., through its subsidiaries, operates social media platforms that offer users engaging and experience across various video and audio-based social platforms. The company operates Bigo Live, a live streaming platform that allows users to live stream specific moments, such as live talk with other users, make video calls, and watch trend videos; Likee, a short-form video social platform that focuses on enabling users to create short-form video; Hago, a casual game-oriented social platform; and imo, a chat and instant messaging application with functions, including video calls, text messages, and photo and video sharing. It operates in the People’s Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, and Southeast Asia and others. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.

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.