Snap Inc (NYSE:SNAP) priced its 200 million share IPO above the $14-$16 price range it set, at $17 to support a $24 billion valuation. After its first two sessions, Snap Inc now has a market capitalization over $38 billion. In comparison, Twitter Inc (NYSE:TWTR) has an $11.5 billion valuation.

Clearly, retail investors, institutions, and businesses alike are all buying up SNAP stock on the prospects and hope that Snapchat becomes the next Facebook Inc (NASDAQ:FB). Comcast Corp‘s (NASDAQ:CMCSA) NBCUniversal invested $500 million in Snap’s IPO.

While Snap Inc does have tremendous growth, it is imperative for investors to remember that the company’s current valuation reflects an enormous bet on both its future and CEO Evan Spiegel. Therefore, I think the following chart from BNLMarketAnalytics.com is very telling.

What’s crucial is just how fast Twitter’s revenue growth fell from a cliff. When Twitter was at the same stage as Snapchat (in 2011 and 2012), it too was growing fast, and showed no signs of slowing down.

If we look at Snapchat versus Twitter Inc at similar points in their business cycle, it is clear that Snap Inc  is growing faster than Twitter did. However, it is spending ferociously, alarmingly so, and its daily active user growth is already “relatively flat”. This fact suggests that it could encounter the same problem as Twitter Inc .

The problem with Twitter was that user growth abruptly slowed, and revenue growth was driven by the company’s ability to monetize. Snapchat does not have that problem now, but neither did Twitter in 2012. Just look how quickly its revenue growth decelerated.

With that said, Twitter is an $11.5 billion company with more than $2.5 billion in annual revenue. Snap Inc has a long way until it reaches $2.5 billion in annual revenue. Yet, Snap Inc’s valuation suggests it will be far larger than Twitter, not equal to.

SNAP stock owners take notice of Twitter & WDAY stock

Before SNAP stock, Workday Inc (NYSE:WDAY) in early 2014 supported  the largest price/sales ratio of any midcap technology company since the dotcom era. WDAY peaked in early 2014 with a price/sales ratio of 40.

WDAY has been dead money ever since, despite consistently exceeding expectations. If Workday Inc can beat expectations yet WDAY remains flat, it illustrates that WDAY stock was in fact too expensive. This is important because SNAP stock trades with a price/sales over 90, which is more than double WDAY peak price/sales in 2014.

The bottom line given Snapchat’s decelerated user growth, comparison to Twitter, and its insane valuation is that in the best case scenario SNAP stock is dead money for many years to come. Worst case, Snap Inc  will see half its value wiped out in relatively short time. Regardless, you don’t want to own SNAP stock.