Everyone wants to know whether we’re in a tech bubble or not right now, and this infographic puts things into a bit clearer focus. Take a look at what the largest social media and tech companies are worth, and how their valuations compare to their revenues – and note that Twitter is the most “overvalued” in terms of revenue to valuation ratio.
As the Atlantic points out, LinkedIn has the highest price-revenue ratio of any stock in the world, as its $200 million in sales in 2010 translated to a $9 billion market cap when it went public this year.
The other companies on this infographic tell a similar story, whether they have gone public or not. Facebook, everyone’s social media investment darling, has an annual revenue of about $2 billion and a valuation of about $75 billion – making it valued at 37.5x its revenue. Groupon, too, is valued at 32.8x its revenue, with a valuation of $25 billion and annual revenue of $760 million.
But Twitter takes the cake for highest revenue-valuation ratio. It is valued a whopping 50x higher than its annual revenue, with a recent valuation of $7.7 billion on the secondary market and revenue of only $150 million last year.
The “Is There a Tech Bubble” infographic comes to us from GPlus, a community of academics and professionals. You can take a look at the huge discrepancies between valuation and revenue for some of the largest tech companies of our day below: