Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.
Because Snap has never been profitable, Shen looked at the price-to-revenue ratio for Snap and several of its peers, rather than the more conventional price-to-earnings ratio normally used when valuing a stock.
Complimentary Tech Event
Transform talent with learning that works
Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More
Snap's IPO valuation of $23.8 billion and 2016 revenue of $404.5 million gives a ratio of 58.8. Shen noted that Snap's price-to-revenue ratio was much higher than those of a lot of other big tech companies at the time of their IPOs.
The closest ratio, according to Shen, was Twitter's, with the social media company's IPO valuation being 44.8 times its revenue.