Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Twitter Inc., current price multiples
| Twitter Inc. | Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Netflix Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | $39.34 | ||||||||||
| No. shares of common stock outstanding | 765,246,152 | ||||||||||
| Earnings per share (EPS) | $-0.29 | ||||||||||
| Operating profit per share | $-0.64 | ||||||||||
| Sales per share | $6.64 | ||||||||||
| Book value per share (BVPS) | $9.55 | ||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to sales (P/S) | 5.93 | 10.36 | 0.63 | 9.53 | 6.56 | 1.94 | 11.28 | 7.40 | |||
| Price to book value (P/BV) | 4.12 | 10.05 | 0.80 | 8.81 | 11.13 | 1.67 | 11.51 | 8.04 | |||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Twitter Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The valuation multiples exhibit significant volatility between 2017 and 2021, characterized by a sharp expansion in 2020 followed by a notable contraction in 2021. This pattern suggests a period of heightened market pricing relative to underlying fundamentals during 2020, followed by a correction toward lower multiples across most metrics.
- Price to Earnings (P/E)
- Data availability is limited, showing a slight increase from 19.57 in 2018 to 20.69 in 2019. Information is absent for 2017, 2020, and 2021.
- Price to Operating Profit (P/OP)
- Extreme fluctuations are observed, with a sharp decline from 633.05 in 2017 to 52.03 in 2018. This was followed by a moderate increase in 2019 and a substantial spike to 2,149.42 in 2020, indicating a significant divergence between share price and operating profit during that year.
- Price to Sales (P/S)
- The ratio remained between 7.75 and 10.04 from 2017 to 2019, before peaking at 15.42 in 2020. A sharp decline followed, with the ratio reaching a five-year low of 5.71 by December 31, 2021.
- Price to Book Value (P/BV)
- A trend consistent with the P/S ratio is evident, as the multiple shifted from a range of 3.47 to 4.86 between 2017 and 2019 to a peak of 7.19 in 2020. The ratio subsequently reverted to 3.97 in 2021.
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Price to Earnings (P/E)
Twitter Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 800,641,166 | 798,152,488 | 782,287,089 | 766,824,550 | 750,904,551 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) (in thousands) | (221,409) | (1,135,626) | 1,465,659) | 1,205,596) | (108,063) | |
| Earnings per share (EPS)2 | -0.28 | -1.42 | 1.87 | 1.57 | -0.14 | |
| Share price1, 3 | 36.24 | 71.79 | 38.77 | 30.76 | 32.66 | |
| Valuation Ratio | ||||||
| P/E ratio4 | — | — | 20.69 | 19.57 | — | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Alphabet Inc. | 25.74 | — | — | — | — | |
| Comcast Corp. | 16.01 | — | — | — | — | |
| Meta Platforms Inc. | 16.44 | — | — | — | — | |
| Netflix Inc. | 33.56 | — | — | — | — | |
| Walt Disney Co. | 137.89 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Media & Entertainment | 23.98 | — | — | — | — | |
| P/E Ratio, Industry | ||||||
| Communication Services | 21.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income (loss) ÷ No. shares of common stock outstanding
= -221,409,000 ÷ 800,641,166 = -0.28
3 Closing price as at the filing date of Twitter Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 36.24 ÷ -0.28 = —
5 Click competitor name to see calculations.
The valuation metrics for the period between 2017 and 2021 exhibit significant volatility, characterized by fluctuating earnings and a sharp, temporary surge in share price.
- Share Price Trends
- The share price experienced a period of relative stability between 2017 and 2019, moving from 32.66 US$ to 38.77 US$. A substantial increase occurred in 2020, where the price peaked at 71.79 US$, representing a nearly 85% increase from the previous year. However, this gain was completely erased by December 31, 2021, as the price corrected to 36.24 US$, returning to levels seen in 2017.
- Earnings Per Share (EPS) Performance
- Profitability was inconsistent over the five-year horizon. After an initial loss of 0.14 US$ per share in 2017, the company achieved positive earnings in 2018 (1.57 US$) and 2019 (1.87 US$). This trend reversed sharply in 2020, with EPS falling to -1.42 US$, followed by a slight recovery to -0.28 US$ in 2021, though the company remained unprofitable.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio is only applicable during the profitable years of 2018 and 2019. During this window, the ratio increased from 19.57 to 20.69, suggesting a slight expansion in the valuation multiple. The absence of P/E ratios in 2017, 2020, and 2021 is a direct result of negative earnings, rendering the metric mathematically non-meaningful for those periods.
- Valuation Divergence
- A notable divergence is observed in 2020, where the share price reached its five-year peak of 71.79 US$ despite a significant decline in earnings to -1.42 US$. This indicates that the market valuation in 2020 was detached from current earnings performance, likely driven by speculative growth expectations or external market conditions, before returning to fundamental alignment in 2021.
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Price to Operating Profit (P/OP)
Twitter Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 800,641,166 | 798,152,488 | 782,287,089 | 766,824,550 | 750,904,551 | |
| Selected Financial Data (US$) | ||||||
| Income (loss) from operations (in thousands) | (492,739) | 26,658) | 366,373) | 453,325) | 38,740) | |
| Operating profit per share2 | -0.62 | 0.03 | 0.47 | 0.59 | 0.05 | |
| Share price1, 3 | 36.24 | 71.79 | 38.77 | 30.76 | 32.66 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | — | 2,149.42 | 82.78 | 52.03 | 633.05 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Alphabet Inc. | 24.86 | — | — | — | — | |
| Comcast Corp. | 10.89 | — | — | — | — | |
| Meta Platforms Inc. | 13.84 | — | — | — | — | |
| Netflix Inc. | 27.71 | — | — | — | — | |
| Walt Disney Co. | 91.54 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | 21.08 | — | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Communication Services | 17.55 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Income (loss) from operations ÷ No. shares of common stock outstanding
= -492,739,000 ÷ 800,641,166 = -0.62
3 Closing price as at the filing date of Twitter Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 36.24 ÷ -0.62 = —
5 Click competitor name to see calculations.
An analysis of valuation multiples from 2017 to 2021 reveals significant volatility and a recurring divergence between market valuation and operational performance.
- Share Price Trends
- The share price experienced a period of moderate stability and growth between 2017 and 2019, followed by a sharp increase to a peak of 71.79 US$ in 2020. This peak was followed by a substantial correction in 2021, with the price falling to 36.24 US$, effectively returning to 2017 levels.
- Operating Profit Performance
- Operating profit per share showed an initial improvement, peaking at 0.59 US$ in 2018. However, a consistent downward trend followed, with profits eroding to 0.03 US$ in 2020 and transitioning into an operating loss of 0.62 US$ per share by the end of 2021.
- Price to Operating Profit (P/OP) Analysis
- The P/OP ratio exhibited extreme fluctuations. A high ratio of 633.05 in 2017 was driven by marginal operating profits. The ratio reached its most conservative level of 52.03 in 2018 as profitability improved. In 2020, the ratio surged to 2,149.42, reflecting a market anomaly where the share price reached its five-year high while operating profit nearly disappeared. By 2021, the ratio became undefined due to the transition to negative operating profit.
The evidence indicates a period of speculative valuation in 2020, where the market price decoupled from operational earnings. The subsequent collapse in share price in 2021 aligns with the deterioration of operational profitability into negative territory.
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Price to Sales (P/S)
Twitter Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 800,641,166 | 798,152,488 | 782,287,089 | 766,824,550 | 750,904,551 | |
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | 5,077,482) | 3,716,349) | 3,459,329) | 3,042,359) | 2,443,299) | |
| Sales per share2 | 6.34 | 4.66 | 4.42 | 3.97 | 3.25 | |
| Share price1, 3 | 36.24 | 71.79 | 38.77 | 30.76 | 32.66 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 5.71 | 15.42 | 8.77 | 7.75 | 10.04 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Alphabet Inc. | 7.60 | — | — | — | — | |
| Comcast Corp. | 1.95 | — | — | — | — | |
| Meta Platforms Inc. | 5.49 | — | — | — | — | |
| Netflix Inc. | 5.78 | — | — | — | — | |
| Walt Disney Co. | 4.08 | 4.13 | — | — | — | |
| P/S Ratio, Sector | ||||||
| Media & Entertainment | 5.56 | — | — | — | — | |
| P/S Ratio, Industry | ||||||
| Communication Services | 3.94 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= 5,077,482,000 ÷ 800,641,166 = 6.34
3 Closing price as at the filing date of Twitter Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 36.24 ÷ 6.34 = 5.71
5 Click competitor name to see calculations.
Between 2017 and 2021, the valuation of the common stock relative to its revenue demonstrated significant volatility, characterized by a sharp peak in 2020 followed by a substantial contraction in 2021. This movement occurred against a backdrop of consistent growth in sales per share throughout the analyzed five-year period.
- Sales per Share Performance
- A continuous upward trend is observed in sales per share, which rose from US$ 3.25 in 2017 to US$ 6.34 in 2021. This steady increase indicates a consistent growth in the company's ability to generate revenue per outstanding share.
- Share Price Volatility
- The share price exhibited significant fluctuations, remaining relatively stable between 2017 and 2019 before surging to a peak of US$ 71.79 in 2020. A sharp correction followed in 2021, with the price declining to US$ 36.24.
- Price-to-Sales (P/S) Ratio Dynamics
- The P/S ratio fluctuated in alignment with share price movements rather than revenue growth. The ratio decreased from 10.04 in 2017 to 7.75 in 2018, before climbing to a peak of 15.42 in 2020. By 2021, the ratio reached its lowest point of 5.71, resulting from the convergence of a declining share price and the highest recorded sales per share.
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Price to Book Value (P/BV)
Twitter Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 800,641,166 | 798,152,488 | 782,287,089 | 766,824,550 | 750,904,551 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 7,307,199) | 7,970,082) | 8,704,386) | 6,805,594) | 5,047,218) | |
| Book value per share (BVPS)2 | 9.13 | 9.99 | 11.13 | 8.88 | 6.72 | |
| Share price1, 3 | 36.24 | 71.79 | 38.77 | 30.76 | 32.66 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 3.97 | 7.19 | 3.48 | 3.47 | 4.86 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Alphabet Inc. | 7.78 | — | — | — | — | |
| Comcast Corp. | 2.36 | — | — | — | — | |
| Meta Platforms Inc. | 5.18 | — | — | — | — | |
| Netflix Inc. | 10.83 | — | — | — | — | |
| Walt Disney Co. | 3.11 | 3.23 | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | 5.68 | — | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Communication Services | 4.28 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 7,307,199,000 ÷ 800,641,166 = 9.13
3 Closing price as at the filing date of Twitter Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 36.24 ÷ 9.13 = 3.97
5 Click competitor name to see calculations.
The Price to Book Value (P/BV) ratio exhibited significant volatility between 2017 and 2021, characterized by a sharp spike in 2020 followed by a reversion toward historical levels. This fluctuation was primarily driven by aggressive movements in the equity share price rather than changes in the underlying book value.
- Share Price Volatility
- The share price remained relatively stable from 2017 through 2019, fluctuating between US$ 30.76 and US$ 38.77. A substantial increase occurred by December 31, 2020, when the price peaked at US$ 71.79, before undergoing a sharp correction to US$ 36.24 by the end of 2021.
- Book Value per Share (BVPS) Progression
- BVPS showed a consistent upward trajectory from 2017 to 2019, rising from US$ 6.72 to a peak of US$ 11.13. However, a gradual contraction followed, with the value decreasing to US$ 9.99 in 2020 and further to US$ 9.13 in 2021.
- P/BV Ratio Dynamics
- The P/BV ratio decreased from 4.86 in 2017 to a stabilized range of 3.47 to 3.48 during 2018 and 2019. The ratio reached a five-year high of 7.19 in 2020, a peak that coincided with the surge in share price despite a simultaneous decline in BVPS. By the end of 2021, the ratio moderated to 3.97, reflecting the alignment of the market price with the adjusted book value.
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