Facebook solution

Facebook solution - Historical Data 9 months 2010 12 months...

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Unformatted text preview: Historical Data 9 months 2010 12 months 2010 Interpretation Revenue ($) ### ### The 2 billion 2010 revenue number comes from Part 1 of the background reading Earnings ($) 355,000,000.00 591,666,666.67 3rd q to 4th q change 66.67% Annualized revenue growth 157.20% Revenue-to-earnings 29.58% Question A P/E ratio Beta BVPS (i) Competitors At the current annual earnigns level of 591 million, a P/E ratio of 84.51 (50 billion/ 591 million) to justify the $50 billion GS valuation Google 24.85 1.2 144.53 In other words, 1.5 billion in earnings is required at an average industry P/E ratio of 33.19. Yahoo 20.73 0.86 9.28 Considering the 2010 revenue to earnigs ratio of 29.6%, Facebook would have to generate 5.1 billion in revenues Ebay 15.32 1.53 11.75 Amazon 71.86 1.16 14.25 Average P/E 33.19 1.1875 44.9525 Goldman' value ### Average P/E 33.19 Required earnings ### (ii) Users Goldman's value ### The artcile states that a J.P. Morgan analyst estimates Facebook generates $4 earnings per user…I would like to see his calculation :)The artcile states that a J....
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This note was uploaded on 10/25/2011 for the course BUS 214 taught by Professor Waker during the Fall '08 term at Cal Poly.

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Facebook solution - Historical Data 9 months 2010 12 months...

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