11 Comments
 

Your question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

 
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illuminatiYour question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.

 
iRX
illuminatiYour question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.

First off, calm down. You're right. My labeling was incorrect as EV includes the firm’s market cap. = SHARE PRICE x total outstanding shares. Complete lapse of concentration. Thanks for clarifying minus the expletives.
 
iRX
illuminatiYour question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.

Take a deep breath

 

i fucking lol'd bro

iRX
illuminatiYour question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.

If the glove don't fit, you must acquit!
 
iRX
illuminatiYour question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.

what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.

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I am talking about what the maindifferences are between deriving a target share price from a relative P/CFPS approach vs. deriving a target share price from a relative EV/EBITDA multiple (obviously backing into an equity value from your calculated Enterprise Value)

 
Gulf Coast FinanceI am talking about what the maindifferences are between deriving a target share price from a relative P/CFPS approach vs. deriving a target share price from a relative EV/EBITDA multiple (obviously backing into an equity value from your calculated Enterprise Value)

Read this: //www.wallstreetoasis.com/forums/ebitda-vs-operating-cash-flow-vs-free-ca…

"The key OPERATIONAL distinction between EBITDA and CFO/OCF is the Change in Net Working Capital. CFO/OCF are also burdened by taxes and interest expense."

 
Gulf Coast FinanceI am talking about what the maindifferences are between deriving a target share price from a relative P/CFPS approach vs. deriving a target share price from a relative EV/EBITDA multiple (obviously backing into an equity value from your calculated Enterprise Value)
The main differences will be: 1) Cash flow can be a wacky and useless measure for a lot of companies, especially growth companies. Earnings are a better predictor of future cash flow than current cash flow, which is on reason to use EBITDA (it is earnings based) 2) The corollary of 1) is that EBITDA will not capture investment (in both working capital and fixed assets) whereas CFPS will. For CapEx intense companies EBITDA is a pretty poor measure of cash flow (both current and future) and you are better off using EV/EBIT or P/E
 

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