NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week were entries about Twitter's fourth-quarter results and the upside and downside for U.S. bonds.
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Not So Tweet
Under normal conditions, the report would have been an excellent one. The problem is that because of the stock's extraordinary run-up after the initial public offering, Twitter set a high standard that could not be met in this release. (Note: In "How Tweet It Is," I outlined why I liked the IPO and why I would have been a buyer in the low-$30s.)
Twitter's fourth-quarter revenue expanded by 116%, to $243 million. As with most advertising-based companies, Twitter's fourth quarter is seasonally strong -- and the company was content regarding Black Friday and Cyber Monday volumes -- so results cannot be annualized.
Twitter reported $45 million of non-GAAP adjusted earnings before interest, taxes, depreciation and amortization. On an incremental basis, it converted 22% of revenue to EBITDA in the quarter, but only 17% for the year. Still, conversion is moving in the right direction, and that is essential for highly valued Internet stocks.
Twitter's average share float came in at 363 million. Using the after-hours price, Twitter has an equity value of $21 billion, net of cash of $2.2 billion and an enterprise value of $18.8 billion. Trailing EBITDA is $75 million, up from $21 million last year. This represents nearly a 250x multiple on 12-month trailing EBITDA.