Reuters / Shohei Miyano
- Alphabet-owned YouTube could be worth as much as $300 billion if it were a standalone company, according to Needham & Company analyst Laura Martin.
- That figure would make the video-sharing platform the 15th largest company in the world by market capitalization ahead of Exxon Mobil, Bank of America, and AT&T.
- Martin's valuation for YouTube is based on estimated 2019 revenue of $30 billion and a 10-times enterprise-value-to-revenue multiple.
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Google purchased YouTube for $1.65 billion in 2006, and now one Wall Street firm estimates the video-sharing platform could be worth $300 billion as a standalone company.
Needham & Company analyst Laura Martin derived that valuation by forecasting the video-sharing platform's 2019 annual revenue and applying an enterprise-value-to-revenue multiple used to evaluate Roku, a streaming player provider.
"YouTube would trade at $300B as a separate public company because streaming and growth investors will NOT buy the GOOGL conglomerate, but would pay 10x EV/Revs for an independent YouTube (Roku's multiple), we believe," Martin wrote in note to clients Tuesday.
Martin estimates YouTube will generate about about $30 billion in sales this year. That prediction is based on three different forecasts for advertising revenue averaging out to $27.6 billion plus about $2 billion in subscription sales.
The three predictions for advertising revenue are based on content acquisition costs, monthly active users, and total hours viewed per day.
The figures for those metrics came from public statements by CEO Susan Wojcicki and estimates from Alphabet's "Other Cost of Revenue" category, where Alphabet currently recognizes YouTube's cost, according to Martin's report.