Investment Banking
Trading comparables
What can the market price of a peer tell you about a target?
Comparable companies offer valuation anchors when their economics and metrics are aligned.
Implied EV = selected peer EV/EBITDA × normalized target EBITDA
A multiple says how much operating value investors pay per unit of normalized earnings. 8× × $9m = $72m. Match the earnings period and accounting basis across peers.
At 8× and $9m normalized EBITDA, implied EV is $72m.
A multiple says how much operating value investors pay per unit of normalized earnings. 8× × $9m = $72m. Match the earnings period and accounting basis across peers.
A target has reported EBITDA $10m including a one-off $2m operating gain. At 8×, what is implied normalized EV?