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I don’t have a strong sense on the valuation of Twitter (TWTR), but I want to share with you forty companies with valuations similar to that of Twitter as of the close on November 7th.

Company Ticker Industry Market cap P/B P/S PE ttm P/EE1 P/EE2 EE growth yield
Adobe Systems Incorporated ADBE 1036 – Software & Programming 27,529.77 4.03 6.61 62.10 34.50 24.50 11.67 -
Alexion Pharmaceuticals, Inc. ALXN 0809 – Major Drugs 24,136.47 10.25 16.88 69.70 36.00 29.00 24.58 -
Allergan, Inc. AGN 0803 – Biotechnology & Drugs 26,830.29 4.41 4.41 21.40 16.70 15.50 13.14 0.20
Allstate Corporation, The ALL 0715 – Insurance (Property & Casualty) 24,567.41 1.22 0.72 13.80 10.30 9.50 9.34 1.90
Archer Daniels Midland Company ADM 0515 – Food Processing 27,157.60 1.39 0.30 18.30 12.60 12.50 10.00 1.90
Baker Hughes Incorporated BHI 0612 – Oil Well Services & Equipment 25,880.76 1.44 1.18 24.10 13.80 11.10 18.75 1.00
BB&T Corporation BBT 0727 – Regional Banks 23,863.10 1.23 3.58 15.80 11.20 10.20 5.98 2.70
Carnival Corporation CCL 0936 – Recreational Activities 27,001.00 1.11 1.76 24.50 21.90 15.80 12.25 2.90
Charles Schwab Corp SCHW 0718 – Investment Services 29,963.52 3.39 5.75 33.00 25.70 21.00 18.95 1.00
CME Group Inc CME 0718 – Investment Services 24,825.87 1.14 8.62 26.70 20.40 18.10 13.17 2.40
Cognizant Technology Solutions CTSH 1036 – Software & Programming 26,408.19 4.96 3.29 23.30 18.70 15.90 18.30 -
Corning Incorporated GLW 1024 – Electronic Instruments & Controls 24,907.02 1.15 3.11 13.80 12.20 10.90 17.60 2.30
Crown Castle International Cor CCI 0939 – Rental & Leasing 21,830.17 7.32 7.53 234.90 92.00 56.70 38.77 -
CSX Corporation CSX 1112 – Railroads 26,726.76 2.71 2.24 14.10 13.40 12.00 11.43 2.30
Cummins Inc. CMI 0218 – Misc. Capital Goods 23,966.10 3.38 1.41 17.10 13.80 11.50 10.00 1.90
Devon Energy Corp DVN 0609 – Oil & Gas Operations 25,591.32 1.28 2.69 (14.80) 11.50 11.00 8.40 1.40
Discover Financial Services DFS 0703 – Consumer Financial Services 25,064.00 2.36 3.33 10.20 10.30 9.80 8.14 1.50
Estee Lauder Companies Inc EL 0521 – Personal & Household Products 27,129.73 8.26 2.66 27.10 21.50 19.10 12.97 1.10
Exelon Corporation EXC 1203 – Electric Utilities 24,541.52 1.15 0.98 21.20 12.70 12.80 (5.23) 4.30
Hess Corp. HES 0609 – Oil & Gas Operations 27,839.92 1.16 1.01 7.90 14.00 14.10 5.80 1.20
LinkedIn Corp LNKD 1018 – Computer Services 25,055.41 9.90 18.09 733.00 100.00 66.00 54.06 -
Marathon Oil Corporation MRO 0606 – Oil & Gas – Integrated 25,041.70 1.32 1.53 15.90 11.20 12.70 10.00 2.20
Marsh & McLennan Companies, In MMC 0712 – Insurance (Miscellaneous) 25,307.43 3.73 2.10 19.70 16.90 15.10 11.42 2.20
Noble Energy, Inc. NBL 0609 – Oil & Gas Operations 26,993.21 3.04 6.05 26.30 17.80 16.70 15.90 0.70
Norfolk Southern Corp. NSC 1112 – Railroads 27,004.80 2.62 2.44 15.30 13.70 12.20 12.55 2.40
Northrop Grumman Corporation NOC 0203 – Aerospace and Defense 24,672.98 2.64 0.99 12.90 13.00 11.90 2.83 2.30
Pioneer Natural Resources PXD 0606 – Oil & Gas – Integrated 28,235.38 3.78 8.22 241.50 34.60 28.50 16.48 -
PPG Industries, Inc. PPG 0103 – Chemical Manufacturing 26,169.80 5.19 1.74 26.80 19.30 17.10 9.25 1.30
Public Storage PSA 0933 – Real Estate Operations 29,002.91 5.61 15.37 37.80 33.10 30.90 6.93 3.30
Raytheon Company RTN 0203 – Aerospace and Defense 27,009.38 3.06 1.11 14.20 13.50 12.00 8.70 2.60
Regeneron Pharmaceuticals Inc REGN 0803 – Biotechnology & Drugs 27,921.68 18.70 16.05 38.20 51.50 35.90 29.70 -
Reynolds American, Inc. RAI 0524 – Tobacco 28,065.60 5.53 3.39 18.10 14.90 13.70 7.70 4.90
Southern Copper Corp SCCO 0124 – Metal Mining 23,964.20 4.61 3.84 14.80 14.30 12.70 11.50 2.40
Spectra Energy Corp. SE 1206 – Natural Gas Utilities 23,682.60 2.71 4.53 25.30 21.30 20.70 5.45 3.40
Sprint Corp S 0915 – Communications Services 26,981.29 1.02 1.02

(6.25)

(16.96)

(94.11)

(32.11)

-

Stryker Corporation SYK 0812 – Medical Equipment & Supplies 28,005.55 3.20 3.15 31.80 16.00 14.70 8.16 1.40
VF Corp VFC 0403 – Apparel/Accessories 23,606.95 4.19 2.11 20.50 17.50 15.40 11.14 1.90
WellPoint, Inc. WLP 0706 – Insurance (Accident & Health) 25,386.06 1.02 0.37 9.30 10.20 9.50 8.21 1.80
Whole Foods Market, Inc. WFM 0957 – Retail (Grocery) 23,509.62 6.21 1.83 43.70 36.60 30.30 18.71 0.60
Williams Companies, Inc. WMB 0609 – Oil & Gas Operations 24,256.36 5.17 3.37 38.20 29.20 23.40 10.80 4.10
Grand Average 25,890.84 2.29 1.76 25.03 17.98 15.79 12.17 1.68

Twitter’s valuation was around $25.9 billion at the close of regular trading on 11/7. The private equity sponsors must be jumping for joy, as they got more than they expected on the IPO, and even more, if the price of Twitter holds up past the time of their lockup, when they can sell their remaining shares.

Twitter has no profits, and trades at 10 times book value, versus 2.3x on their competitors here. Price-to-Sales is around 50, versus 1.8 for competitors here.

There is one thing certain here, there is a lot of profits growth expected out of Twitter. It has to go from negative profits to positive, and then soar thereafter. That would justify the valuation.

But how likely is that? There are few companies that ever do that. So be wary and avoid Twitter stock, realizing there is a small chance that it might be worth its present valuation, much less more.

Disclosure: No positions in any companies mentioned here.

Source: What A Tweet Valuation!