where did you hear that 3.5x number? I thought 10x revenue was common for internet companies. Although this isn't an internet company, but they did get their start on the internet (I think?)
The short cut is to compacte with other players in the same industry. Somewhere else in the thread it's said that Gilette is valued 2,5x. So 3,5x is not too far off.
The real way investment managers calculate potential worth is much more complex, calculating expenditures per dollar earned, looking at the market saturation, risks from competitors etc. Because these calculations are usually the same for businesses in the same industry the shortcut is usually close.
In this case their multiplier might be higher than that of Gilette because they spend less on marketing and they're smaller but with a steeper growth curve.
