Sticking with the restaurant theme, for about the same amount, you could string together Darden (DRI), Dunkin Brands (DNKN), Panera (PNRA) and Wendy's (WEN), which have generated nearly $16 billion in trailing revenue, $825 million in net income, and a have a 1.48 price to sales ratio.
Alternatively, for the same market cap, (and this is my favorite), you could put together Brinker (EAT), Buffalo Wild Wings (BWLD), Cracker Barrel (CBRL), Cheesecake Factory (CAKE), Texas Roadhouse (TXRH),Jack in the Box (JACK), Papa John's (PZZA), Dine Equity (DINE), Bob Evans (BOBE), Red Robin (RRGB), Sonic (SONC) and AFC Enterprises (AFCE).
Combined, this group generated $17.2 billion in revenue and $880 million in net income, and has a 1.32 price-to-sales ratio. Furthermore, after collecting a year's worth of distributions generated by the dividend payers in this group of companies, there would be enough cash ($240 million) to purchase Nathan's Famous (NATH), theoretically that is.
Admittedly, restaurants are not an apples-to-apples comparison to new-fangled social-media companies with high expected growth rates. But they may help to put Twitter's valuation into perspective. Analysts are expecting Twitter to generate $1.14 billion in revenue for 2014, which puts the forward price-to-sales ratio at a more respectable, but still very high 20, especially for a company that is not expected to be profitable until 2015.Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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