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I thought P/E is calculated for companies with a positive EPS. Twitter is loosing money. Not sure how you came up with P/E of 87.

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> I thought P/E is calculated for companies with a positive EPS. Twitter is loosing money. Not sure how you came up with P/E of 87.

Short answer I got it from my bloomberg terminal.

Long answer.

P/E is different from estimated( or forward) P/E. See https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio

You are technically correct. Silicon Valley uses P/E when calculating valuation/revenue, because startups are rarely profitable.

They aren't equivalent in the same way that user growth and revenue growth are not equivalent to profit growth. A misinformed statistic for a misinformed view of how to build a successful business.

Valuation/revenue would be price/sales, or P/S if you will. The P/E is a "forward P/E", with P = "today's price" and E = "someone's expectation of next year's earnings".

I agree on what it actually is, mine was a comment on how it is used. I've seen P/E used many times in SV referring to valuation/revenue.

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