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Tweaker was founded by Trent Nevills in Portland, Oregon. Trent has a MS from Carnegie Mellon's Tepper School of Business with focus on quantitative Finance and a BA from the University of Washington. He used that education to work on Wall Street, managing more than $6b in assets at different... More
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  • Facebook IPO Valuation

    The world has been waiting for possibly the biggest IPO in history. Rumor has it, they may file next week.

    We have populated the web version of Tweaker with the following:

    Revenue: 4.2b (which is $1b higher than previously built-in using Mashable as a source in Sep 2011).

    Profit margin: 37.5% (matching previous estimates of 3.2b and 1.2b in profit).

    Growth: Put a starting point of 60% - move it up or down as you see fit!

    Share Count: 2.3535 billion shares

    You can convert to market cap merely by taking share count below and multiplying the stock price in Tweaker…

    e.g,. 2.3535 billion shares x $34.00/share (midway on consensus of Tweaker Consensus now) = 80 billon dollar market cap.

    100 billion market cap = $42 share price, at the upper end of the Tweaker Consensus.

    Further Reading: How Facebook's Expected $100 Billion IPO Breaks Down [Infographic]

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: IPO, Facebook IPO
    Jan 27 5:34 PM | Link | Comment!
  • Is Google Overvalued?

    Google missed its Wall Street targets Thursday, triggering a 9% slide in its shares before after-market trading. Google is Avoid/High Risk valuation in Tweaker (Image 1, below), needing higher margins and/or faster growth to earn higher valuation.

    Image 1- GOOG was stretching valuation, requiring a beat to maintain price levels, not a miss!

    Economic pressure in Europe could have weighed Google's margins, as noted by numerous analysts.

    Margins on net revenues are 42% but only 32% on gross revenues. Excluding 'certain items' as high as 37%, which is about as high as profits as a percent of revenues has ever been for any company can be, but even with that extreme level of profitability, the stock seemed overvalued unless higher margins and/or faster growth are ahead for the firm.

    Expenses Offset Strong Overall Growth

    Google's operating expenses outpaced revenue growth, increasing to 32% of revenue during the fourth quarter, versus 30% of revenue at this time last year. The amount of clicks on Google's search ads increased sharply during the last three months of the year, but the cost per clicks - the money that Google charges advertisers for the ads - decreased 8% from the third quarter. There was news about a 10% increase in the workforce and negative press about the difficulties with the acquisition of Motorola Mobile. GOOG has exceeded Wall Street expectations eight quarters in a row - is this a turning point in that tendency?

    Growth Going Forward

    Analysts project revenue will increase by 33.20% this year and another 22.80% next year. Earnings are expected to increase by 24.60% this year and an additional 19.10% next year and continue for the next five years at an annual rate of 19.10%. Those numbers are already represented in Tweaker along with Wall Street consensus growth also shown in Image 1, above. Google ad revenue continues to literally spill-off cash and sales of Android-based phones are beginning to add up. Google CEO Larry Page notes that over 250 million Android devices have been activated worldwide.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GOOG
    Jan 27 3:10 PM | Link | Comment!
  • Netflix - How High Should It Go?
    On Monday, Hedge Fund manager and CNBC contributer Whitney Tilson set out a prediction that Netflix (NASDAQ:NFLX) gains are just beginning, saying, "it's a long way from the point at which I'd sell it."

    He predicted NFLX could grow 30%-40% along with the rest of the industry - saying, "As long as Netflix has dominant market share and no new competitors to erode its competitive position - we see no reason why Netflix's business won't grow at 30-40% - the same rate as the industry."

    So, if Netflix did grow 30-40% With Tweaker, our stock valuation tool, its easy reflect your own opinion of a stocks valuation by plugging in your own percentage ranges. Plugging the percentage ranges into Tweaker, our mobile stock valuation tool - it will make a chart for you with a clear range of where the stock gets overvalued and undervalued based on your entered percentages.

    Currently, Wall Street consensus has Netflix growing at 21.3-28.8% with a profit margin of 4.1-5%. Following Tilson's recommendation, let's Tweak growth to 30-40% and profit margin to 8%. Streaming margins are in the 8+% range and because Netflix is facing higher content charges profit margin is likely to stay in the lower percentages even though growth is potentially quite high.

    Profitable range goes from $100-$180 to $125-$260, becoming overvalued near its previous peak.

    more about what tweaker does and how it does it.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 26 2:53 PM | Link | Comment!
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