Analyst: YouTube Could Be Worth $300 Billion As A Standalone Company

By Amit Chowdhry ● November 6, 2019
  • Needham & Company analyst Laura Martin recently published a report suggestion YouTube could be worth $300 billion as a standalone company

Needham & Company analyst Laura Martin recently published a report suggesting that YouTube, the video-sharing platform owned by Alphabet could be worth $300 billion if it were a standalone company. Based on this valuation, it would make YouTube the fifteenth largest company in the world by market capitalization. And this would make YouTube more valuable than companies such as Bank of America, AT&T, Ford, Home Depot, Verizon, Merck, Pepsi, and Exxon Mobil.

How did Martin come up with the valuation? It is based on YouTube’s estimated 2019 revenue of $30 billion and a 10-times enterprise-value-to-revenue multiple. This is the same multiple that is used for the Roku streaming player.

“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,” said Martin in a note to clients via Business Insider.

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Alphabet subsidiary Google originally acquired YouTube for $1.65 billion in 2006. However, Alphabet does not specifically disclose how much revenue YouTube makes. So the $30 billion revenue prediction is based on 3 different forecasts for ad revenue at about $27.6 billion and $2 billion subscription sales.

The three ad revenue predictions are extrapolated from content acquisition costs, monthly active users, and total hours viewed per day. And those metrics were captured from public statements that were made by YouTube CEO Susan Wojcicki and the estimates from Alphabet’s “Other Cost of Revenue” category where the cost of YouTube is revealed.