Private Equity Analyst Position

Forward multiple is usually lower. You are typically forecasting some growth in EBITDA, so taking the fixed PP divided by the newer, higher EBITDA results in a lower multiple.

Lol, how do you get monkey shit for that? I just clarified for the OP that a forward multiple isn't always lower and then provided a real-life, current example of how the company doesn't have to be performing badly for a higher forward multiple.

OP, if you are still reading this, the answer should vary depending on the case, as discussed above. That should be your answer. But you should say that more often than not, analysts are projecting growth, so the forward multiple will frequently be lower. If we could all see the future of each company and the general economy, I imagine that might change (if you could predict an upcoming recession, you're probably going to revise EBITDA down, right?)

The example I gave with railcar manufacturers is a real life example of profitable companies (I have one in mind that is a solid investment recommendation), and their backlogs are coming off record highs. Their backlogs give them 5-7 quarters of visibility, but new orders are coming in much lower than where they were over the past two years, effectively reducing the backlog value each quarter. At some point - after the backlog is reduced to a certain point - they won't be delivering as many orders as they were during the peak, so their results will be lower (higher forward multiple). However, they are just coming off record operations; it's not like they are now in a recession - you'd think of it more as they are back at normal to slightly under normal operating capability.