Reddit vs. Bumble: Which Social Networking Stock is a Better Buy?

Core Viewpoint - The social networking market is projected to experience significant growth, with Reddit (RDDT) and Bumble (BMBL) positioned to benefit from this trend, although BMBL shows greater upside potential due to stronger earnings growth and a cheaper valuation [2][15]. Group 1: Market Overview - The global social networking market size is expected to grow from $95.33 billion in 2025 to$ 209.82 billion by 2030, reflecting a CAGR of 17.09% [2]. - Both RDDT and BMBL are likely to capitalize on the rapid growth in the social networking sector [2]. Group 2: Reddit (RDDT) Analysis - RDDT's advertising revenue increased by 61% year over year, reaching $358.6 million in Q1 2025 [3]. - Weekly active users grew by 31% to 401 million, while daily active users also rose by 31% to 108 million, indicating increased engagement [3]. - The introduction of Reddit Answers, an AI-powered search tool, reached one million weekly users and expanded globally [4]. - Enhancements to Reddit Pro in May 2025 included streamlined profile setup and new tools for businesses to engage with communities [5]. - Despite these advancements, RDDT faces intense competition and a stretched valuation, which may hinder its market share in advertising [16]. Group 3: Bumble (BMBL) Analysis - BMBL is enhancing user experience through new features, AI-driven personalized matching, and growth in its Bumble BFF friendship platform [6][7]. - The Bumble BFF platform has over one million active users, particularly appealing to Gen Z and young professionals [8]. - BMBL is actively removing bots and low-quality profiles to foster a trusted community, which is crucial for sustainable growth [9]. Group 4: Financial Performance and Valuation - Year-to-date, RDDT and BMBL shares have declined by 34% and 30%, respectively, due to a challenging macroeconomic environment [10]. - RDDT shares are currently overvalued with a Value Score of F, while BMBL shares are trading at a cheaper valuation with a Value Score of A [12]. - The Zacks Consensus Estimate for RDDT's 2025 earnings is$ 1.21 per share, reflecting a 136.34% year-over-year increase, while BMBL's estimate is 86 cents per share, indicating a 118.66% increase [14]. Group 5: Conclusion - BMBL is positioned for long-term success with its focus on expanding its platform beyond dating, AI-driven personalization, and engagement with Gen Z [15]. - RDDT's growth is hindered by competition and valuation concerns, making BMBL a stronger investment choice [15][17].