S&P Capital IQ Equity Research Issues Twitter Pre-IPO Report Projects substantial revenue growth but operating profitability not expected through 2014

NEW YORK, Oct. 30, 2013 /PRNewswire/ -- As the much-awaited IPO of Twitter fast approaches on or about November 7, S&P Capital IQ Equity Research has issued a special 16-page pre-IPO report.

(Logo: http://photos.prnewswire.com/prnh/20130524/NY19925LOGO)

"We project substantial revenue growth for Twitter over the next few years," said Scott Kessler, Head of Technology Sector Equity Research and Internet Equity Analyst at S&P Capital IQ.  "Based on our estimates, we calculate a compound annual growth rate for revenue of 97% from 2013 to 2015, driven largely by the advertising business, as the company focuses on monetization and seizes upon international opportunities.  However, Twitter has been losing money, and we do not foresee operating profitability until 2015," continued Mr. Kessler, who authored the report. 

Without earnings, Mr. Kessler believes an appropriate way to value Twitter is relative price-to-sales and price-to-sales-to-growth analysis.  As part of the report, he assembled a peer group of 10 publicly traded high-growth technology, Internet, and social media companies.  His analysis yields a valuation of $11.3 billion to $13.7 billion, which is below where Twitter valued itself last month, and below the contemplated IPO valuation, based on the initial price range indicated by the company. 

Mr. Kessler's valuation assessment reflects the considerable risks he sees related to some confusion about Twitter's offerings and their appeal, a number of larger and comparably positioned competitors, indications of decelerating growth in users and engagement, significant operating and net losses he sees through 2014, and his view that Twitter has somewhat lacking corporate governance.

Mr. Kessler will be participating in a conference call on his assessment of Twitter on November 4 at 11 am ET, followed by a live Twitter Chat.   Information on these events can be obtained by clicking on the following link.     http://bit.ly/17sGd3u

About S&P Capital IQ
S&P Capital IQ, a part of McGraw Hill Financial (NYSE: MHFI), is a leading provider of multi-asset class and real time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, corporations and universities around the world. Evaluated pricing is prepared by Standard & Poor's Securities Evaluations, Inc., a part of S&P Capital IQ and a registered investment adviser with the U.S. Securities and Exchange Commission. S&P Capital IQ provides a broad suite of capabilities designed to help track performance, generate alpha, identify new trading and investment ideas, and perform risk analysis and mitigation strategies. Through leading desktop solutions such as Capital IQ, Global Credit Portal and MarketScope Advisor desktops; enterprise solutions such as S&P Valuations; and research offerings, including Leveraged Commentary & Data, Global Markets Intelligence, and company and fund research, S&P Capital IQ sharpens financial intelligence into the wisdom today's investors need.  For more information, visit www.spcapitaliq.com.

About S&P Capital IQ's Equity Research
As one of the world's largest producers of independent research, S&P Capital IQ licenses its research to global institutions for their investors and advisors. S&P Capital IQ's team of experienced U.S., European and Asian analysts use a fundamental, bottom-up approach to assess a global universe of equities across industries worldwide. S&P Capital IQ's equity research can be found on MarketScopeAdvisor® and S&P Capital IQ. These online platforms provide financial advisors and investors with actionable investment intelligence on multiple asset classes including stocks, ETFs, mutual funds, fixed income and workflow tools that enable advisors to stay connected to the market and their investments. For more information, visit www.spcapitaliq.com.

All information provided by S&P Capital IQ is impersonal and not tailored to the needs of any person, entity or group of persons.  Past performance is no indication of future results. S&P Capital IQ and its affiliates provide a wide range of services to, or relating to, many organizations, including issuers of securities, investment advisers, broker-dealers, investment banks, other financial institutions and financial intermediaries, and accordingly may receive fees or other economic benefits from those organizations, including organizations whose securities or services they may recommend, rate, include in model portfolios, evaluate or otherwise address.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only current as of the stated date of their issue. Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested. Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate. Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation of particular securities, financial instruments or strategies to you nor is it considered to be investment advice. Before acting on any recommendation in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice.

This material is based upon information that we consider to be reliable, but neither S&P Capital IQ nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. With respect to reports issued to clients in a language other than English and in the case of inconsistencies between the English and translated versions of a report, the English version prevails. Neither S&P Capital IQ nor its affiliates guarantee the accuracy of the translation. Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Neither S&P Capital IQ nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

SOURCE S&P Capital IQ



RELATED LINKS
http://www.spcapitaliq.com

More by this Source

Best of Content We Love 2014 


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.