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Friday, January 9, 2015

Twitter (TWTR) : 1-year performance

** weekly chart **

3 weeks later, daily chart:

Twitter's first year performance (Nov 2013 - Nov 2014):

Nov. 19, 2014 -- Twitter Inc. needs a much bigger increase in revenue than the microblogging service expects to justify its share price, according to Aswath Damodaran, a finance professor at New York University.

The above compares Twitter’s stock price since going public in November 2013 with his estimate of the company’s value, $20.81 a share. Damodaran, the author of four books on business valuation, cited the figure in a posting on his blog.

Shares of Twitter have never traded for less than their initial price of $26 apiece. 

“Twitter has its work cut out for it,” Damodaran wrote in the posting. “It has to either find ways to grow much faster than it is projecting or it has to work at bringing investor expectations down.”

The estimate was based on a projected $14 billion in revenue and a 25 percent operating margin, or earnings after production costs as a percentage of sales, in 10 years. Chief Financial Officer Anthony Noto gave the revenue forecast in an investor presentation. The company had $1.17 billion
of sales for the 12 months ended in September 2014.

For Twitter’s valuation to exceed $40, revenue would have to be almost twice Noto’s projection, based on an analysis of data from the posting. A lower operating margin would require even more sales growth, and vice versa.

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