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.

CompanyTickerIndustryMarket capP/BP/SPE ttmP/EE1P/EE2EE growthyield
Adobe Systems IncorporatedADBE1036 – Software & Programming   27,529.77     4.03     6.61     62.10     34.50    24.50         11.67       –
Alexion Pharmaceuticals, Inc.ALXN0809 – Major Drugs   24,136.47   10.25   16.88     69.70     36.00    29.00         24.58       –
Allergan, Inc.AGN0803 – Biotechnology & Drugs   26,830.29     4.41     4.41     21.40     16.70    15.50         13.14   0.20
Allstate Corporation, TheALL0715 – Insurance (Property & Casualty)   24,567.41     1.22     0.72     13.80     10.30       9.50           9.34   1.90
Archer Daniels Midland CompanyADM0515 – Food Processing   27,157.60     1.39     0.30     18.30     12.60    12.50         10.00   1.90
Baker Hughes IncorporatedBHI0612 – Oil Well Services & Equipment   25,880.76     1.44     1.18     24.10     13.80    11.10         18.75   1.00
BB&T CorporationBBT0727 – Regional Banks   23,863.10     1.23     3.58     15.80     11.20    10.20           5.98   2.70
Carnival CorporationCCL0936 – Recreational Activities   27,001.00     1.11     1.76     24.50     21.90    15.80         12.25   2.90
Charles Schwab CorpSCHW0718 – Investment Services   29,963.52     3.39     5.75     33.00     25.70    21.00         18.95   1.00
CME Group IncCME0718 – Investment Services   24,825.87     1.14     8.62     26.70     20.40    18.10         13.17   2.40
Cognizant Technology SolutionsCTSH1036 – Software & Programming   26,408.19     4.96     3.29     23.30     18.70    15.90         18.30       –
Corning IncorporatedGLW1024 – Electronic Instruments & Controls   24,907.02     1.15     3.11     13.80     12.20    10.90         17.60   2.30
Crown Castle International CorCCI0939 – Rental & Leasing   21,830.17     7.32     7.53   234.90     92.00    56.70         38.77       –
CSX CorporationCSX1112 – Railroads   26,726.76     2.71     2.24     14.10     13.40    12.00         11.43   2.30
Cummins Inc.CMI0218 – Misc. Capital Goods   23,966.10     3.38     1.41     17.10     13.80    11.50         10.00   1.90
Devon Energy CorpDVN0609 – Oil & Gas Operations   25,591.32     1.28     2.69   (14.80)     11.50    11.00           8.40   1.40
Discover Financial ServicesDFS0703 – Consumer Financial Services   25,064.00     2.36     3.33     10.20     10.30       9.80           8.14   1.50
Estee Lauder Companies IncEL0521 – Personal & Household Products   27,129.73     8.26     2.66     27.10     21.50    19.10         12.97   1.10
Exelon CorporationEXC1203 – Electric Utilities   24,541.52     1.15     0.98     21.20     12.70    12.80         (5.23)   4.30
Hess Corp.HES0609 – Oil & Gas Operations   27,839.92     1.16     1.01       7.90     14.00    14.10           5.80   1.20
LinkedIn CorpLNKD1018 – Computer Services   25,055.41     9.90   18.09   733.00   100.00    66.00         54.06       –
Marathon Oil CorporationMRO0606 – Oil & Gas – Integrated   25,041.70     1.32     1.53     15.90     11.20    12.70         10.00   2.20
Marsh & McLennan Companies, InMMC0712 – Insurance (Miscellaneous)   25,307.43     3.73     2.10     19.70     16.90    15.10         11.42   2.20
Noble Energy, Inc.NBL0609 – Oil & Gas Operations   26,993.21     3.04     6.05     26.30     17.80    16.70         15.90   0.70
Norfolk Southern Corp.NSC1112 – Railroads   27,004.80     2.62     2.44     15.30     13.70    12.20         12.55   2.40
Northrop Grumman CorporationNOC0203 – Aerospace and Defense   24,672.98     2.64     0.99     12.90     13.00    11.90           2.83   2.30
Pioneer Natural ResourcesPXD0606 – Oil & Gas – Integrated   28,235.38     3.78     8.22   241.50     34.60    28.50         16.48       –
PPG Industries, Inc.PPG0103 – Chemical Manufacturing   26,169.80     5.19     1.74     26.80     19.30    17.10           9.25   1.30
Public StoragePSA0933 – Real Estate Operations   29,002.91     5.61   15.37     37.80     33.10    30.90           6.93   3.30
Raytheon CompanyRTN0203 – Aerospace and Defense   27,009.38     3.06     1.11     14.20     13.50    12.00           8.70   2.60
Regeneron Pharmaceuticals IncREGN0803 – Biotechnology & Drugs   27,921.68   18.70   16.05     38.20     51.50    35.90         29.70       –
Reynolds American, Inc.RAI0524 – Tobacco   28,065.60     5.53     3.39     18.10     14.90    13.70           7.70   4.90
Southern Copper CorpSCCO0124 – Metal Mining   23,964.20     4.61     3.84     14.80     14.30    12.70         11.50   2.40
Spectra Energy Corp.SE1206 – Natural Gas Utilities   23,682.60     2.71     4.53     25.30     21.30    20.70           5.45   3.40
Sprint CorpS0915 – Communications Services   26,981.29     1.02     1.02

    (6.25)

   (16.96)

  (94.11)

       (32.11)

       –

Stryker CorporationSYK0812 – Medical Equipment & Supplies   28,005.55     3.20     3.15     31.80     16.00    14.70           8.16   1.40
VF CorpVFC0403 – Apparel/Accessories   23,606.95     4.19     2.11     20.50     17.50    15.40         11.14   1.90
WellPoint, Inc.WLP0706 – Insurance (Accident & Health)   25,386.06     1.02     0.37       9.30     10.20       9.50           8.21   1.80
Whole Foods Market, Inc.WFM0957 – Retail (Grocery)   23,509.62     6.21     1.83     43.70     36.60    30.30         18.71   0.60
Williams Companies, Inc.WMB0609 – 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