Calculate a basic EV/EBITDA valuation range from comparable company multiples.
You need a quick valuation range for a software services target with $6 million of normalized EBITDA. Three useful peers trade at 7.5x, 8.2x, and 9.0x EV/EBITDA. One distressed company trades at 4.1x but has negative growth and should not anchor the base range. Comparable Company Analysis: choose relevant peers, select the right multiple, exclude or adjust outliers, then apply a range to the target metric. The common trap is grabbing one peer multiple and calling it value. That creates fake precision and hides comparability issues, especially when peer growth, margin, leverage, customer concentration, or distress differs from the target.…
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