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  • Facebook VS Twitter And The Winner Is .... 0 comments
    Feb 6, 2014 1:42 PM | about stocks: TWTR, FB

    1. Price to sale ratio round:

    FB's price/ current sale ratio is about 158B /7.9B = 20 while TWTR's price/2014 projected sale ratio is about 36.6B/ 1.15B~1.2B = 31

    Winner: FB

    2. EV/EBITDA round:

    FB's current EV/EBITDA is about 147B/3.8B = 38.5 while TWTR's current EV/2014 projected EBITDA is 35.3B/150M~180M = 214

    Winner: FB

    3. Number of Users round:

    FB has 1.23 billion users in 2013 while TWTR has 241 million users as of today's earnings report.

    Winner: FB

    Conclusion:

    By comparing FB with TWTR, one can argue TWTR is overvalued while one can also argue FB is undervalued. To combine these views, we can easily see FB is a better investment than TWTR at the current price level, and FB has more upside than TWTR while TWTR has more downside than FB.

    Disclosure: I am short TWTR.

    Stocks: TWTR, FB
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