Valuing Reddit is hard
Reddit and the limits of equity analysis
Here is a not especially useful comparison:
That’s Reddit in the past two years, compared with Facebook when it was roughly the same size in revenue terms. One might notice a lot of interesting differences. Facebook was already generating cash profits in 2009, and its growth rate was much higher, but Reddit is generating many more dollars per user than Meta was back then. Adding more details to the comparison would uncover other suggestive points of difference. You might also bring in valuation, noting that Reddit is trading at 13 times trailing revenue, right where Meta was after its 2012 IPO, and so on.
None of these details will matter much. I remember working as an analyst during Google’s IPO in 2004 and a financial journalist during Meta-née-Facebook’s IPO eight years later. I remember some of the things I said about each company. But I’m not telling you what they were, because it would embarrass me to do so. Suffice it to say that when Facebook IPO’d, the big worry in the analytic establishment was whether it could monetise on mobile devices. That did not turn out to be a problem:
That is Meta back when it was Reddit’s current size compared with today. It has compounded free cash flow at more than 50 per cent a year. The only possible response to this is awe.
It is possible to build a model that estimates what Reddit’s number of active users, revenue per user and cost base will be in five or 10 years. Lots of people are doing this now. Somebody’s model may turn out to be almost right. But in an important sense there is only one question that matters, and it’s not about numbers: can Reddit become a global phenomenon on the model of Meta, or even close? If so, its current $10bn valuation is a bargain.
Or will Reddit end up like Twitter/X and Snap, which are big but not as big as Meta, and have struggled to turn users into money as efficiently as Meta has? What, broadly, has made the difference? I confess that I do not know how to answer those questions — which are not financial questions in any meaningful sense — in a disciplined way. And I’m slightly sceptical that anyone else knows how to do it, either. But I’m open to suggestions.
Moderna advances multiple vaccine programs to late-stage clinical trials (107.41)
- Co announced at its fifth Vaccines Day event clinical and program updates demonstrating advancement and acceleration of its mRNA pipeline.
- The updates include data readouts in the Company's respiratory and latent and other vaccine portfolios, as well as commercial, manufacturing and financial announcements for its vaccines business.
- Moderna is advancing five vaccine candidates against viruses that cause latent infections, all of which are in clinical trials. When latent, a virus is present in the body but exists in a resting state, typically without causing any noticeable symptoms. Latent viruses can reactivate and cause clinical symptoms as a person ages, during times of stress or when immunity is compromised. The capacity for latency is a de?ning feature of members of the Herpesviridae family, including cytomegalovirus (CMV), Epstein-Barr virus (EBV), herpes simplex virus (HSV) and Varicella-Zoster virus (VZV).
- Moderna's EBV vaccine candidates are designed to tackle multiple EBV-associated conditions, including prevention of IM (mRNA-1189) and MS and post-transplant lymphoproliferative disorder, a subcategory of lymphoma in solid organ transplant patients (mRNA-1195). The Phase 1 trial for mRNA-1189 was designed to test the safety, reactogenicity and immunogenicity of four different dose levels in participants 12 to 30 years of age in the U.S. The randomized, observer-blind, placebo-controlled study showed mRNA-1189 was immunogenic and generally well tolerated across all dose levels. The Company is advancing mRNA-1189 toward a pivotal Phase 3 trial.
Kimberly-Clark provides longer-term outlook in investor presentation; reaffirms FY24 guidance (126.09)
- Kimberly-Clark Corporation announced that today, Mike Hsu, Chairman and Chief Executive Officer, and members of his executive leadership team are unveiling the next phase of the company's transformation, including a new operating model and key commercial initiatives designed to grow its brands and businesses at a faster pace than its categories.
- The company will focus on driving a step-change in performance by sharpening its strategic focus through a new operating model that leverages three synergistic forces:
- Accelerating Pioneering Innovation to capture significant growth available in its categories by investing in science and technology to satisfy unmet and evolving consumer needs.
- Optimizing its Margin Structure to deliver superior consumer propositions at every rung of the price-value ladder. The company will implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement. The planned supply chain modernization is expected to generate more than $3 billion in gross productivity and $500 million in working capital savings that will be used to help fuel growth investments.
- Wiring its Organization for Growth to drive agility, speed, and focused execution that extends the company's competitive advantages further into the future. In the coming months, the company plans to reorganize its operations into three business segments
- Long-Term Growth and Return Algorithm - Kimberly-Clark has set long-term growth and return targets that include:
- Organic Net Sales growth ahead of market growth;
- Adjusted Operating Profit growth in the mid-to-high single digits on a constant currency basis;
- Adjusted EPS growth in mid-to-high single digits on a constant currency basis; and
- Annual Free Cash Flow generation of at least $2 billion.
- 2024 Outlook
- The company noted that the outlook it provided in January is consistent with its new long-term growth and return targets. The company continues to expect to deliver a low-to-mid single-digit percentage increase in 2024 Organic Net Sales versus the prior year period, with growth in reported Net Sales forecast to reflect negative impacts of approximately 300 basis points from currency translation and 60 basis points from the Brazil Tissue divestiture. Adjusted Operating Profit is still expected to grow at a high single-digit to low double-digit rate on a constant-currency basis and Adjusted Earnings Per share are expected to grow at a high single-digit rate on a constant-currency basis versus the prior year period. Reported growth in Operating Profit and Earnings Per Share are still expected to be negatively impacted by approximately 400 basis points from currency translation.
Early premarket gappers
Gapping up:
STKS +12.7%, NCNO +12.7%, MNOV +11%, OUST +6.8%, ROIV +5.6%, NOAH +5.2%, MRK +4.8%, STOK +3.7%, RUN +2.8%, MITT +2.7%, AZN +1.8%, NVAX +1.1%, CDLX +1.1%, SNDX +0.9%, NFE +0.8%
Gapping down:
GME -18.1%, FRGE -12.5%, BWMN -10%, OGI -6.7%, WDH -3.9%, NIO -3.8%, CNXC -2.9%, GD -1.6%, ZUO -1.1%, NBTB -1%
>>> Up
* Adyen Upgraded at Morgan Stanley; PT Raised to 1,850 Euros
* Aubay Raised to Buy at IDMidcaps; PT 45 euros (+)
* Credit Agricole Raised to Buy at Deutsche Bank (+)
* Deutsche Bank Raised to Overweight at Morgan Stanley
* Howden Joinery Raised to Buy at Stifel; PT 975 pence (+)
* Leonardo Raised to Add at AlphaValue/Baader
* Lundin Mining Raised to Outperform at BMO; PT C$16
* Petershill Raised to Buy at Numis; PT 240 pence
* Petershill Raised to Buy at Numis; PT 240 pence
* Proximus Raised to Hold at ING; PT 7.50 euros
* Royal Gold Raised to Outperform at BMO; PT $158
* SGL Raised to Buy at HSBC; PT 10 euros
* Telenor Raised to Outperform at BNPP Exane; PT 135 kroner
* Wacker Chemie Raised to Hold at DZ Bank; PT 110 euros (+)
* YouGov Cut to Hold at Stifel; PT 1,200 pence (+)
>>> Down
>>> Down
* BMW Cut to Hold at Jefferies; PT 110 euros
* C.H. Robinson Cut to Neutral at BNPP Exane; PT $76
* Credit Agricole Cut to Underweight at Morgan Stanley
* DWS Cut to Hold at Bankhaus Metzler; PT 41.40 euros (+)
* Elisa Cut to Underperform at BNPP Exane; PT 40 euros
* FedEx Cut to Underperform at BNPP Exane; PT $250
* Hamborner REIT Cut to Hold at M.M. Warburg; PT 7.20 euros (+)
* HSBC Cut to Equal-Weight at Barclays; PT 740 pence
* HSBC Cut to Equal-Weight at Barclays; PT 740 pence
* Life Science REIT Cut to Hold at Jefferies; PT 45 pence
* Lufthansa Cut to Hold at Deutsche Bank (+)
* Sandvik Cut to Hold at Pareto Securities; PT 260 kronor
* SocGen Cut to Hold at Deutsche Bank (+)
* Tele2 Cut to Neutral at BNPP Exane; PT 88 kronor
* Visa Cut to Neutral at Redburn; PT $307
>>> Initiation
>>> Initiation
* Affluent Medical Rated New Buy at TP ICAP Midcap; PT 3.20 euros (+)
* Mycronic Rated New Buy at Nordea; PT 470 kronor
* Schott Pharma Rated New Hold at Berenberg; PT 38 euros
* Spotify Rated New Buy at HSBC; PT $310
* Spotify Rated New Buy at HSBC; PT $310
* Straumann Rated New Buy at Goldman; PT 170 Swiss francs
* Syensqo Rated New Hold at Jefferies; PT 78 euros
* Wolters Kluwer Rated New Buy at ING; PT 170 euros
>>> Call
* BMW Cut to Hold at Jefferies, Already Pricing In Cash Returns
>>> Call
* BMW Cut to Hold at Jefferies, Already Pricing In Cash Returns
* Citi’s Manthey Sees Smaller European Stocks Driving Broad Gains (+)
* Credit Agricole Downgraded at Morgan Stanley, KBC Top Pick (+)
* Schott Pharma Qualities Already Priced In, New Hold at Berenberg
- Telenor (TEQ TH) +2.4%
- Telenor Raised to Outperform at BNPP Exane; PT 135 kroner
- BAE (BSP TH) +2.1%
- Adyen (1N8 TH) +1.5%
- Adyen Upgraded at Morgan Stanley on Growth Outlook Support (1)
- Prosus (1TY TH) +1.5%
- TUI (TUI1 TH) +1.4%
- Rolls-Royce (RRU TH) +1.3%
- Wolters Kluwer (WOSB TH) +1.2%
- Wolters Kluwer Rated New Buy at ING; PT 170 euros
- Deutsche Bank (DBK TH) +0.9%
- Deutsche Bank Raised at Morgan Stanley, Stock Has Further to Run
- Reckitt (3RB TH) +0.8%
- Reckitt Benckiser to Start Third and Final Tranche Buyback
- Bawag (0B2 TH) +0.8%
- LVMH (MOH TH) -0.8%
- BNP Paribas (BNP TH) -0.8%
- Hochtief (HOT TH) -0.8%
- Delivery Hero (DHER TH) -0.9%
- Shell (R6C0 TH) -1.1%
- BMW (BMW TH) -1.1%
- BMW Cut to Hold at Jefferies, Already Pricing In Cash Returns
- Rubis (BYN TH) -1.3%
- Lufthansa (LHA TH) -1.5%
- Lufthansa Cut to Hold at Deutsche Bank
- Moncler (MOV TH) -1.5%
- Kone (KC4 TH) -2.2%
DAX:
- Deutsche Bank (DBK TH) +1%
- Deutsche Bank Raised at Morgan Stanley, Stock Has Further to Run
- BMW (BMW TH) -1%
- BMW Cut to Hold at Jefferies, Already Pricing In Cash Returns
MDAX:
- SMA Solar (S92 TH) +5.9%
- SMA Group reports extraordinarily strong 2023
- Hensoldt (HAG TH) +2%
- Lufthansa (LHA TH) -1.4%
- Lufthansa Cut to Hold at Deutsche Bank
- Aroundtown (AT1 TH) -2.5%
- Aroundtown Sees 2024 FFO I EU280M to EU310M, Est. EU291.7M (1)
SDAX:
- SGL (SGL TH) +2.9%
- SGL Raised to Buy at HSBC; PT 10 euros
- CompuGroup (COP TH) +2.3%
- Suess MicroTec (SMHN TH) +1.6%
- Suess MicroTec FY Ebit Misses Estimates
- Hamborner REIT (HABA TH) +1%
- flatexDEGIRO (FTK TH) -1.1%
Japanese stocks advanced amid a weak yen even as the rest of Asia struggled for momentum following a late selloff on Wall Street. The dollar strengthened against most major peers. The yen pared some of its loss after initially sliding to its lowest level versus the dollar in about 34 years following Japan’s Finance Minister Shunichi Suzuki’s stern intervention warning. The currency’s drop has fanned speculation that the nation will step up its efforts to stem the decline, and put the Nikkei 225 index on course for a record closing high. Investors have driven the yen higher after “dovish comments” from BOJ board member Naoki Tamura, said David Forrester, Singapore-based senior FX strategist at Credit Agricole. “The warning by Kanda earlier this week suggests the BOJ’s finger will be on the trigger for FX intervention,” he said, referring to Japan’s vice finance minister for international affairs Masato Kanda. Shares retreated in China and Hong Kong, with technology companies accounting for the majority of the losses. The decline came as the region’s AI-linked companies mirrored the overnight fall in Nvidia’s shares, and as Alibaba’s plan to shelve listing of its logistics arm soured sentiment.
Japan’s Nikkei 225 is one of few Asian equity gauges that are able to match the pace of the US rally — advancing more than 20% this year and on track for one of its best quarters ever. Hong Kong has been unable to fully recover after plunging at the start of the year and is headed for a slight decline in the three-month period, while Sydney is set to post a modest gain. Even the recent advance in Chinese stocks will likely be tested, as key financial institutions announce earnings, starting with Industrial & Commercial Bank of China Ltd. later Wednesday. Alibaba Group Holding Ltd. declined in Hong Kong, and was poised for its lowest close since January, after the company called off a $1 billion-plus initial public offering for its Cainiao logistics arm. Chinese EV giant BYD Co. also fell after reporting 2023 profit that missed estimates. Apple Inc.’s iPhone shipments in China dropped about 33% in February from a year ago, according to official data, extending a slump in demand for the flagship device in its most important overseas market. US stock futures extended their gains pointing to a rebound on Wall Street after the S&P 500 declined for a third day on Tuesday. The US equity benchmark is on track to notch five straight months of gains, but traders are debating whether the road gets rougher for the $4-trillion rally to keep chugging along as stock valuations remain elevated relative to history. Treasuries steadied in Asian trading after rebounding from session lows on Tuesday following a $67 billion sale of five year-notes. The yen slumped to the lowest level in about 34 years against the greenback on expectations Japan’s wide yield gap with the US will remain even though the Bank of Japan has ended its negative interest rate policy. The dollar was slightly stronger against its Group-of-10 peers, while the offshore yuan was little changed weaker after the People’s Bank of China once again boosted support for the currency. Profits at China’s industrial companies increased in the first two months of the year, extending a gaining streak since August and adding to positive signs in the economy. Oil extended a modest decline after an industry report pointed to a sizable build in US inventories, and wider markets struck a weaker tone ahead of the end of the quarter. Gold fell, but traded close to its record. As traders geared up for the Fed’s preferred inflation gauge on Friday — when markets will be closed — they parsed the latest economic readings. US consumer confidence held steady, durable goods orders climbed while home-price growth accelerated at the fastest rate since 2022. US After Hours NCNO +11.9%, NOAH +3.8% higher on earnings; GME -14.4%, CNXC -3% lower on earnings; MRK +4.8% as FDA approves Winrevair; ROIV +5% higher as it will join S&P MidCap 400.
Nikkei +0.90% Hang Seng -0.95% CSI -0.57% Shanghai -0.60% Shenzen -1.85%
Eur$ 1.0830 CNH 7.2542 CNY 7.2275 JPY 151.68 GBP 1.2618 CHF 0.9038 RUB 92.4751 TRY 32.2254 WTI$ 80.87 -0.92% Gold 2,179 BTC 70,480 +0.92% ETH 3,612 +0.99%
S&P +0.32% Nasdaq +0.32% EuroStoxx -0.08% FTSE -0.03% Dax +0.01% SMI +0.07%
Macro :
- EU Warns Election Deepfakes Start to Surface in Member Nations
- Traders Need to Consider a Much More Hawkish BOJ: Macro Models
- Hashdex Fund Targets March 27 to Trade as Spot-Bitcoin ETF (1)
Keep an eye on :
Keep an eye on :
- AC FP : CitizenM Owners Explore Potential Sale of Hotel Group: FT
- ACLN SW : Accelleron FY Revenue Beats Estimates
- ARGX BB : Argenx Moves Efgartigimod for SjD in Adults to Phase 3
- AZN LN : Astra Splits Drug Production to Protect Against Geopolitics Risk
- AT1 GY : Aroundtown Suspending 2023 Dividend Payout Amid ‘Uncertainties’
- AT1 GY : Aroundtown Sees 2024 FFO I EU280M to EU310M, Est. EU291.7M
- ATO FP : David Layani, debt, liquidity… The truths of Paul Saleh, the CEO of Atos
- BHG SS : BHG Extends Financing Agreement, Reduces Total Credit Facilities
- CNS IM : Honeywell Offers to Buy Civitanavi Systems For EU6.30/Share
- 2007 HK : Country Garden Hires Kroll for Liquidation Analysis: Reuters
- CYTK US : Cytokinetics Spikes as Betaville Says Lilly May Be Interested
- DBHN GY : DB Schenker Attracts as Many as 10 Bids, Handelsblatt Reports
- EQT SS : Supply Chain Risk Firm Avetta Said to Attract EQT, Warburg
- FACC AV : FACC FY Ebit Beats Estimates
- GAM SW : GAM Holding to Propose Rights Issue For Up to CHF100M at AGM
- GFT GY : GFT Technologies Names Marco Santos New CEO, Effective July 1
- GFT GY : GFT Technologies Names Marco Santos New CEO, Effective July 1
- GVOLT PL : Greenvolt FY Net Income EU1.2M Vs. EU16.6M Y/y
- HMB SS : H&M 1Q Gross Margin Beats Estimates
- HSBA LN : HSBC Announces Gold Token to Retail Customers in Hong Kong
- IMCD NA : IMCD Buys Gova Ingredients; No Financial Terms
- JEN GY : Jenoptik Sees 2024 Ebitda Margin 19.5% to 20%, Est. 19.8%
- SKB GY : Koenig & Bauer FY Ebit Matches Estimates
- LEHTO FH : Lehto Group 4Q Loss per Share EU0.18
- MAERSKB DC : Maersk to Implement Surcharge on Rail Bookings Via Rotterdam
- Marex IPO : Marex Group Files for US IPO After Earlier Dropping UK Listing
- MRK US : Merck's $11.5 Billion Bet on Its Next Big Drug Finally Arrives -- WSJ
- NEXI IM : UniCredit Nears Deal to Revise Terms on Nexi Payment Processing
- RAA GY : Rational FY Dividend per Share Misses Estimates
- SWAV US : Shockwave Hits Record High on Report of J&J Takeover Talks
- ENR GY : Siemens Energy's Gas Unit Sales Rebound With Decarbonization
- SMDS LN : DS Smith Confirms International Paper Talks at 415 Pence/Shr
- SMHN SW : Suess MicroTec FY Ebit Misses Estimates, Suess MicroTec Sees 2024 Sales EU340M to EU370M
- STLN SW : Swiss Steel Sale Talks of Several Sites in France Discontinued
- UBSG SW : UBS Rents Entire Tower in HK’s West Kowloon Area
- UBSG SW : Apollo to Buy $8B of Secured Financing Facilities From UBS
- UMG NA : Universal Music to Distribute BTS, Rappers in New Hybe Deal
- UCG IM : Nexi's Guidance Pared on Spending Slowdown: Equity Outlook
- WSU GY : Washtec FY Ebit Meets Estimates
- YPSN SW : Ypsomed Plans to Sell Pen Needle, BGM Business to MTD