Multiples Question
In a comps analysis, can a p/e ratio be higher than peer median while ev/ebitda ratio be lower? Why or why not? Thanks.
In a comps analysis, can a p/e ratio be higher than peer median while ev/ebitda ratio be lower? Why or why not? Thanks.
+269 | My chaotic IB journey | 27 | 17h | |
+211 | MS M&A vs GS HC | 49 | 4h | |
+185 | Ending My Life if I don't get an SA 2025 Offer | 66 | 23m | |
+115 | Anyone live in a different country before? What’s it like? | 45 | 1h | |
+74 | Hazing in the Bullpen. What to do? | 17 | 1h | |
+66 | Improving in TMT | 27 | 3h | |
+54 | MD shoved food down my throat. Is this normal? | 16 | 1d | |
+41 | Later Chodes - I'm Taking My Talents to The Mega Fund Leagues | 10 | 7h | |
+37 | Basically necessary to be a varsity athlete to get BB IB from Bowdoin? | 22 | 2d | |
+27 | Good jokes for interview? | 10 | 3h |
Career Resources
yes, if the company has:
1) a higher than average cash balance; and / or 2) a higher than average amount of debt; and / or 3) a higher than average depreciation & amortization / capitalized expenditures.
Yes it can. Take a look at Amazon and imagine you're comparing to a lot of similar companies.... From Yahoo Finance:
http://uk.finance.yahoo.com/q/ks?s=AMZN
If you think about it, there is no link between earnings and enterprise values so there is no reason why EV / EBITDA should have a solid link to P / E, so there is no reason why they cannot each fluctuate wildly with respect to each other. Poorly worded post I know, tired.
This is a dangerous way to look at this question. There is ABSOLUTELY a link between earnings, ebitda, enterprise value, and stock price. The link is not constant and the relationship can vary depending on factors such as capital structure, cash balance, and the line items between EBITDA and Net Income such as the amount of capitalized expenditures (and therefore depreciation & amortization), interest (capital structure dependent), tax rates, etc. But there is DEFINITELY a link. As these factors vary versus the mean of the company's peer set, the EV / EBITDA and P / E multiples can vary either upward or downward versus the company's peers and produce the situation the OP is describing.
Fuga qui numquam omnis tempore dignissimos dolores. Accusantium nulla maxime pariatur autem facere. Natus suscipit nemo quis dolorem. Sit labore magni expedita. Omnis aut rerum similique minima.
Veritatis natus nemo itaque tempore quia nesciunt. Laborum explicabo nihil et dolor atque perspiciatis sed. Commodi voluptate laborum officiis velit amet ea. Asperiores pariatur pariatur maiores aut maxime occaecati dolore. A labore qui illo ipsam non. Quo eum officiis ut laudantium. Laboriosam natus adipisci sed in quas eum.
Ex voluptas nesciunt ex rerum similique distinctio sint. Et rerum est quia doloremque. Architecto rem non est atque. Voluptatem et dolor labore velit expedita magnam. Voluptates eum est corrupti voluptate. Sit blanditiis magni quis perspiciatis ducimus quasi minus.
Et repellat adipisci sequi omnis dolorem qui. Vitae necessitatibus rerum sit non recusandae quaerat. Exercitationem et sit voluptatum quia.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...