Reddit (NYSE:RDDT) versus Five9 (NASDAQ:FIVN) Critical Review

Five9 (NASDAQ:FIVN) and Reddit (NYSE:RDDT) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares Five9 and Reddit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five9	-6.56%	-9.09%	-2.88%
Reddit	N/A	N/A	N/A

Earnings and Valuation

This table compares Five9 and Reddit’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five9	$939.06 million	4.21	-$81.76 million	($0.85)	-63.01
Reddit	$804.03 million	9.91	N/A	N/A	N/A

Reddit has lower revenue, but higher earnings than Five9.

Analyst Recommendations

This is a summary of current ratings and price targets for Five9 and Reddit, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five9	0	3	15	0	2.83
Reddit	1	6	8	1	2.56

Five9 presently has a consensus price target of $84.88, indicating a potential upside of 58.47%. Given Five9’s stronger consensus rating and higher possible upside, research analysts clearly believe Five9 is more favorable than Reddit.

Institutional & Insider Ownership

96.6% of Five9 shares are owned by institutional investors. 1.8% of Five9 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Five9 beats Reddit on 6 of the 11 factors compared between the two stocks.

About Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company's platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, California.

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.