Valuation (EBITDA) Multiples Where Companies Trade

Smaller companies tend to trade at lower valuation (EBITDA) multiples, because they are more risky (i.e. less diversified) than larger companies. 

• Small businesses with revenues under $5 million typically trade 2 to 3 times earnings (EBITDA).

• Companies with revenues under $150 million typically trade 4 to 7 times EBITDA.

• Companies with revenues under $500 million typically trade 8 to 9 times EBITDA.

• Companies with revenues under $1 billion typically trade 10 to 12 times EBITDA.

• Growing companies with revenues greater than a $1 billion earnings often trade at multiples greater than 12 times EBITDA.

Comments

[medical billing]

revenues greater than a $1 billion earnings often trade at multiples greater than 12 times EBITDA.

[credit card]

very informative post, i really didn't know that.