Business

Twitter Inc (TWTR): 40 Companies With A Similar Market Cap

I don’t have a strong sense on the valuation of Twitter Inc (NYSE:TWTR), but I want to share with you forty companies with valuations similar to that of Twitter Inc (NYSE:TWTR) 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 Inc (NYSE:TWTR) holds up past the time of their lockup, when they can sell their remaining shares.

Twitter Inc (TWTR): 40 Companies With A Similar Market Cap

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 Inc (NYSE:TWTR) stock, realizing there is a small chance that it might be worth its present valuation, much less more.

Full disclosure: no position in Twitter Inc (NYSE:TWTR) or any companies mentioned here.

By David Merkel, CFA of Aleph Blog