Normally it's based on (roughly) multiples of revenue, future earnings, etc. Their revenue this year was estimated to be like 370 million. Let's compare that

Normally it's based on (roughly) multiples of revenue, future earnings, etc. Their revenue this year was estimated to be like 370 million. Let's compare that to recent IPO darling Nutanix. Nutanix had revenue of approximately $241 million and was valued at north of 2 billion. So that's approximately 10 dollars of worth for every dollar of revenue. If you were to use the same ratio, then it would be suggested that snapchat's valuation is approximately 3.7 billion dollars. There are also LOTS of factors such as is the company profitable, what do their margins look like, what does future growth look like (as often share price is also dependent on growth expectations), etc. My understanding is they were anticipating just shy of a billion in revenue in 2017 (which is ~ 300% growth (which is pretty remarkable at this size). Anyways, that's how some of these numbers come to be. (edit: spelling)