Is WeWork worth $40 billion or $3 billion?

WeWork is not your typical real estate company. Rather, according to CEO and cofounder Adam Neumann, it’s a “community” and a “state of consciousness,” bringing people together to “change the world.” Investors agree: They think Neumann’s sweeping vision is worth $20 billion at the very least, and maybe as much as $40 billion.

But for all Neumann’s ambition to expand beyond coworking and into housing, education, and more, WeWork’s core real estate business remains its primary source of revenue. The company charges a monthly fee for access to a desk or dedicated office, and it currently boasts 256,000 customers, or “members.” In the first quarter of this year, those members generated $342 million in revenue, double last year.

That pace of growth sets WeWork apart from established office providers like IWG and Regus. But is it enough to justify a valuation of $20 billion, or $40 billion?

Not in the slightest, according to an analysis by the Financial Times. Compare WeWork’s revenue to those competitors, applying the same multiple, and Neumann’s company is worth $3 billion, tops. Even compared to a startup unicorn like Airbnb, the FT argues, WeWork’s value appears inflated, based on sales.

Put another way, anyone willing to invest in WeWork at a $40 billion valuation would have to believe that each of the company’s members is worth $156,250. Regus members, by contrast, are worth around $11,300.

Of course, the FT‘s conservative analysis is based on a snapshot of WeWork today, without taking into account the growth trajectories of the company’s newer business lines. A few years from now, WeWork expects its enterprise business to comprise a considerably larger portion of sales, as it signs contracts with bigger and bigger customers. Forays into housing and education, while still unproven, hold similar promise.

Whether public markets ultimately value WeWork at $3 billion or $40 billion is no mere academic question. A company’s valuation affects its ability to recruit talent, for example. It can also serve as a source of immediate wealth for founders, who are increasingly choosing to cash out some of their equity through secondary transactions, in advance of an exit.

But despite the allure, a high valuation can punish employees who join at later stages. As venture investor Fred Wilson notes in a recent blog post, “the higher the valuation, the less money the employee will make on their equity.” Moreover, at companies forced into down rounds, it is employees, and their common stock, who stand to lose the most, while investors and founders take comfort in their more privileged shares.

WeWork declined to comment.