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Hebridesby Allermuir Capital®

Glossary

EV/Revenue multiple

Enterprise value divided by revenue, the most common valuation multiple for companies that are not yet profitable.

Enterprise value is equity value plus net debt, so the multiple compares the whole business to its sales whatever its financing. For subscription companies the same idea is often expressed as EV/ARR.

A revenue multiple ignores margins and cash generation, so two companies at the same multiple can carry very different risk. Growth, gross margin and retention explain much of the spread between peers.

In Hebrides

Comparables shows who has bought companies like the target and at what EV/Revenue, built on Dealroom data.

Comparables

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