eMarketer pegs Twitter’s revenue at $400 mn in 2013, but the explosive growth isn’t expected to stop there.The latest from VentureBeat indicates a revenue target of $1.19 bn five years from now. For 2011, the forecast is $140 mn in revenue – small compared to Facebook’s projected $4.27 bn, but the company isn’t likely as close to a liquidity event.
Of course, there’s a reason for this. VentureBeat reports:
However, we have to remember that the microblogging platform’s revenue-generating suite of ad products hasn’t even been fully rolled out yet. Saying the company’s revenue efforts are still in a “nascent stage,” secondary market SharesPost researchers stated, “We believe the company is still a year or two from fully monetizing all aspects of its platform.”
So, what will Twitter be worth when it breaks the billion-dollar mark?
As for valuation, the report reads, “Assuming steady state revenues of $1.195B in 2016, normalized net margins of 25 per cent, a growth multiple of 25x, and discounting to 2011 at a discount rate of 20 per cent, we arrive at a target 2011 enterprise value of $3.0B. Accounting for estimated cash in hand of $600M we arrive at a market capitalisation of $3.6B.”
That’s a lot lower than the company’s recent implied valuation of $8 bn, not to mention its secondary market trading implied valuation of $6.8 bn.