LinkedIn’s Valuation: How Are LinkedIn’s Users Valued Relative To Twitter?
LinkedIn (NYSE:LNKD) and Twitter (NASDAQ:TWTR) generally cater to different social networking needs of the online community, but they still are often compared in terms of valuation, user growth, user engagement and profitability. This is natural, considering the companies went public within two years of each other (2011-2013), both compete for user attention, and both had similar blockbuster initial growth trajectories in the internet/social networking domain. Below we take a look at how the two companies compare in terms of key valuation metrics.
The market values LinkedIn’s users at almost five times the value of a Twitter user. Although LinkedIn’s active user base (105 million) is around one-third of Twitter’s base of 310 million, its market cap is over 60% higher than Twitter’s. Additionally, despite the smaller monthly active user base (reported as unique visiting members), LinkedIn’s total revenue in 2015 was 35% higher than Twitter’s. Owing to LinkedIn’s better user addition growth, improving user engagement and cash flow generation, it is valued at 158x of its user base compared to Twitter’s 33x (Facebook is valued at 201x). Meanwhile, LinkedIn’s market capitalization to revenue multiple is 5.6x, compared to Twitter’s 4.6x.
- Can LinkedIn’s New Salary Benchmark Tool Drive Premium Memberships?
- LinkedIn Reports Solid Q3 Earnings; Microsoft Merger On Track
- What To Expect From LinkedIn’s Q3 Earnings
- LinkedIn’s Next Move To Increase Its User Base In India
- Why Is LinkedIn Focusing On India?
- Here’s How LinkedIn Can Benefit From Expanding Pro-Finder?
The major factors driving this valuation difference are LinkedIn’s relatively faster user growth and significantly higher free cash flow generation compared to Twitter.
Have more questions about LinkedIn? See the links below.
- LinkedIn’s Valuation: How Are LinkedIn’s Users Valued Relative To Facebook?
- LinkedIn Q1 2016 Review: Key Factors For Robust 35% Top Line Growth
- LinkedIn Beats Q1 2016 Estimates On Solid Revenue Growth, Tax Benefits
- 2015 In Review: LinkedIn, Facebook And Twitter
- Can LinkedIn’s New Mobile App Increase User Engagement?
- Is LinkedIn Ready To Face Competition?
- What Is LinkedIn’s Revenue and EBITDA Breakdown?
- What Is LinkedIn’s Fundamental Value Based On Expected 2016 Results?
- By What Percentage Did LinkedIn’s Revenue & EBITDA Margin Change In The Last 5 Years?
- How Has LinkedIn’s Revenue Composition Changed In The Last 5 Years?
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)