Relative Valuation (Multiples)

Valuation

What is Relative Valuation (Multiples)?

A valuation approach that compares a company's price multiples, such as P/E or EV/EBITDA, with those of similar companies or with its own history.

Why Relative Valuation (Multiples) matters

Multiples indicate how the market prices a company relative to a benchmark. They do not estimate what the business may be worth from its own cash flows.

Compare Relative Valuation (Multiples)

DCF vs Multiples

Related terms in Valuation

DCF (Discounted Cash Flow)Intrinsic Value Market Capitalization P/B Ratio (Price-to-Book)P/E Ratio (Price-to-Earnings)P/S Ratio (Price-to-Sales)PEG Ratio Residual Income Model Terminal Value

Definitions are provided for educational and informational purposes only and are not investment advice. Consult a qualified financial advisor before making investment decisions.