What Are Valuation Multiples (P/E, EV/EBITDA)? — How to read

The large number in each tile is the multiple value (e.g. P/E = 18.5×); the badge on the top right (Cheap / Fair / Expensive) tells you which band it falls in. The header shows MCap (Market Cap) and EV (Enterprise Value = MCap + Net Debt). EV is fairer than MCap when comparing companies with different capital structures. All multiples are computed on a TTM (trailing 12-month) basis — they're smoothed of quarterly noise. A '—' value means the denominator is negative or zero (e.g. P/E can't be computed for a loss-making company). Treat that N/A as a signal to use another multiple.

What Are Valuation Multiples (P/E, EV/EBITDA)? — Watch out for

Not every cheap-looking stock is good ('value trap'): when P/E is low, check whether earnings are temporary or one-off (e.g. an asset sale inflating profit). If P/E and EV/EBITDA diverge widely, the company is highly leveraged — prefer EV/EBITDA for comparison. P/E and P/FCF are meaningless for loss-making or cash-burning growth firms; use P/S, EV/Revenue, and growth rates instead. Multiples alone don't tell you the 'right price'; combine with the DCF Calculator below.

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What Are Valuation Multiples (P/E, EV/EBITDA)?

The Valuation Multiples card shows the classic price multiples that compare market price to earnings (P/E), book value (P/B), free cash flow (P/FCF) and revenue (P/S), plus the capital-structure-neutral EV/EBITDA. Each multiple is color-banded as Cheap / Fair / Expensive against general market averages.

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How to read

The large number in each tile is the multiple value (e.g. P/E = 18.5×); the badge on the top right (Cheap / Fair / Expensive) tells you which band it falls in.
The header shows MCap (Market Cap) and EV (Enterprise Value = MCap + Net Debt). EV is fairer than MCap when comparing companies with different capital structures.
All multiples are computed on a TTM (trailing 12-month) basis — they're smoothed of quarterly noise.
A '—' value means the denominator is negative or zero (e.g. P/E can't be computed for a loss-making company). Treat that N/A as a signal to use another multiple.

Threshold ranges

P/E ≤ 15Cheap relative to the broad market.
P/E 15 – 25Fair — close to market average.
P/E > 25Expensive — high growth is priced in.
EV/EBITDA ≤ 10Cheap on a debt-adjusted basis.
EV/EBITDA > 16Expensive — especially watch for leveraged firms.
P/FCF ≤ 15Cheap on cash generation — a quality signal.
P/B ≤ 1.5Cheap on book value; important for financials.
P/B 1.5 – 3Fair — close to market average.
P/B > 3Expensive — above book value.
P/S ≤ 2Cheap on revenue.
P/S 2 – 6Fair revenue multiple.
P/S > 6Expensive — growth is priced in.

Watch out for

Not every cheap-looking stock is good ('value trap'): when P/E is low, check whether earnings are temporary or one-off (e.g. an asset sale inflating profit).
If P/E and EV/EBITDA diverge widely, the company is highly leveraged — prefer EV/EBITDA for comparison.
P/E and P/FCF are meaningless for loss-making or cash-burning growth firms; use P/S, EV/Revenue, and growth rates instead.
Multiples alone don't tell you the 'right price'; combine with the DCF Calculator below.

Sector note

Tech, pharma, and software historically trade at higher multiples (P/E 25-40); banks usually sit at lower P/E (8-12) and are sensitive to P/B; retail and airlines have very cyclical multiples.

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How to read

Threshold ranges

Watch out for

Sector note

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