Comparable Trading Analysis - How to use revenue multiple to value a company

Is it make a sense to value a company based on revenue multiples when company reporting negative EBITDA?

1 Answer(s)


The only way to value a company with negative EBITDA is the revenue multiple. That is why typically early stage startups are typically valued using revenue multiples, since their EBITDA's are always negative.

EBITDA multiples are typically used to value companies that are more mature and profitable.