Re:Snap falls to IPO price
by adventured on Monday July 10, 2017 @06:18PM
(#14740175)
Facebook has been profitable each fiscal year they've been public. Their first full year public they produced $1.5 billion in net income.
Facebook is tracking to a ~31 PE ratio for fiscal 2017, with a growth rate that is still high.
$14 billion in net income (fiscal 2017 speculative), is a lot more important as a metric than $200 per user. If they push that net income up to $30 billion over the next four or five years (very plausible), at 24 times earnings (at that point, speculating on a $720b market cap), maybe their per user climbs to $300+ - it still won't matter, the net income is what will matter.
Snapchat doesn't possess any of the positive financial qualities that Facebook had, to square against the high per user value.
Facebook is tracking to a ~31 PE ratio for fiscal 2017, with a growth rate that is still high.
$14 billion in net income (fiscal 2017 speculative), is a lot more important as a metric than $200 per user. If they push that net income up to $30 billion over the next four or five years (very plausible), at 24 times earnings (at that point, speculating on a $720b market cap), maybe their per user climbs to $300+ - it still won't matter, the net income is what will matter.
Snapchat doesn't possess any of the positive financial qualities that Facebook had, to square against the high per user value.