After Twitter’s (TWTR) spectacular IPO, TWTR stock has given up some gains, down about 12%. Yet the valuation remains at outsized levels, as the stock currently trades at a Price/Sales ratio of 35.
Make no mistake: There are much more affordable ways to play the social media and mobile megatrends.
Besides, Twitter has some lingering issues, as I’ve noted in a recent post for the IPO Playbook. Perhaps the most troubling is the deceleration in user growth, which has dropped from 10.27% quarter-over-quarter in Q1 to 6.13% in Q3. Twitter might very well remain a niche player, never reaching breadth of users that Facebook (FB) has. That’s only speculation for now, but we should get some evidence once Twitter starts reporting daily average users.
So which companies should you be looking at? Here are 3 social media stocks that are better than Twitter: