Damodaran multiple industry. and global stock markets.
Damodaran multiple industry 7 %µµµµ 1 0 obj >/Metadata 16553 0 R/ViewerPreferences 16554 0 R>> endobj 2 0 obj > endobj 3 0 obj >/XObject >/Font >/ProcSet[/PDF/Text/ImageB/ImageC Ratings, Interest Coverage Ratios and Default Spread. The Bogle Center; He is known in the investment industry and The next major update will be in early January 2026, God willing, though a few of the data sets will get updated more frequently. The average damodaran's industry cost of equity of companies in the sector is 10. Nike Inc's Damodaran's Industry Cost of Capital of - is significantly outside the interquartile range and is excluded from the distribution. 5% with a standard deviation of 0. Valuation multiples by industry, including EV/Revenue and EV/EBITDA multiples. I generally say, and have seen that plus or minus 10 or 20% similar companies in the same industry overall financial performance after the the top line in certain revenue brackets . Easy-to-understand insights on valuations inspired by investment legends. 18: 5: Aluminum: While there are numerous services, including many free ones, that report data statistics, broken down by geography and industry, many look at only subsamples (companies in the most widely used indices, large market cap Aswath Damodaran presents an approach for analyzing and using multiples (e. 3x +430. The GCC’s diversification efforts continue to mitigate global and regional challenges. International Journal of Business Innovation and Research 29 (2), 252-266, 2022. 6x +944. Statistical techniques: If your firms vary on more than one dimension, you can try using multiple regressions (or variants thereof) to arrive at a “controlled”estimate for your firm. be f ollowed to determine industry multiples: (i) multiples of companies that were . Industry multiples Q2’24 GCC EV/Revenue EV/EBITDA P/E P/B In the last three decades, we have seen this process play out in industry after industry, from the retail business (with Amazon), the music business (with Apple iTunes first and Spotify later), ¨ How do changes in these fundamentals change the multiple? ¤ The relationship between a fundamental (like growth) and a multiple (such as PE) is almost never linear. Over 10 companies were considered in this analysis, and 15 had meaningful values. ! • Almost 85% of equity research reports are based upon a multiple and comparables. Download: From the KPMG survey of Metrics similar to Damodaran's Industry Cost of Debt in the valuation category include:. Most people now have cell phones and use wireless telecom services. 85%: 9. a Q2 CY24. 0%. 0% Non-Energy Minerals 351. Industry Average EBITDA Multiple Number of companies; Insurance - Reinsurance: 4. 11 at the start of the pandemic in 2020 but made a significant recovery the year after, reaching 5. The chapter begins by defining firm and enterprise value multiples and then examine how they are distributed across companies. 7%. Industry Name Number of firms EV/EBITDAR&D EV/EBITDA EV/EBIT EV/EBIT (1-t) EV/EBITDAR&D2 EV/EBITDA3 EV/EBIT4 EV/EBIT (1-t)5 multiple of the market value of equity to the revenues of a firm; this is termed the price-to-sales ratio. 4x-39. Betas Data Used: Multiple data services. About. Firms wi. 2% Real Estate and Rental and Leasing 231. 6% with a standard deviation of 1. txt) or read online for free. Betas Damodaran - Free download as PDF File (. 7x: Higher multiples for more in-demand specialties, e. The data presented in the table above shows that, the REIT - Industrial industry has the highest average P/S ratio of 7. 03% It is perhaps a reflection of my age that I remember when getting data to do corporate financial analysis or valuation was a chore. From January 2024 to June 2024, the sales growth in this industry is 15% while as of CY23, the growth was at 20%. Business Valuation Services. ! Most equity valuations on Wall Street are relative valuations. Also includes other risk measures including operating earnings variability and price-based risk measures. Download Table | Most relevant multiples valuation multiples by industry from publication: Valuation Multiples: The studies of Harbula (2009), Damodaran (2012), Fernandez (2013) Damodaran sottolinea che l’applicazione di sconti ai multipli di valutazione è un processo complesso e soggettivo. n How large are the outliers to the distribution, and how do we deal with the outliers? Table of Contents 3–4 Foreword 5-6 Summary: Multiples by Sector 7 Median EV/EBITDA Multiples by Sector Industry Multiples 8–11 Apparel 12–15 Auto Parts and Equipment 16–19 Household Appliances 20–23 Electric and Gas Utilities 24–27 Energy 28–31 Banks 32–35 Consumer Finance 36–39 Capital Markets 40–43 Household and Personal Products 44–47 %PDF-1. 74: 61: Department Stores: 7. 8: 24: Thermal Coal: 4. 94%: 5. 7x-354. autism; Residential multiples Levered, unlevered and pure play betas by industry. He also explains how to examine a range of earnings, book value, and revenue multiples and discusses how to use multiples wisely and catch abuses when they occur. 2-5. Industry multiples Below are the quarter-on-quarter movements of the industry multiples for the countries in the GCC region. Below is a comparative snapshot of Q2’24 multiples with the corresponding quarter, Q2’23 for select industries. For startups. 4 Year Price Total Return - The total change in price (adjusted of dividends and splits when applicable) over the last 4 years. 27% The data is based on the early 2020 estimate, published annually by Prof Prof. Search Clear. The average damodaran's industry cost of equity of companies in the sector is 8. There is a high demand for construction equipment due to the government’s infrastructure-led growth agenda. These are applied to compute the Terminal value in the DCF method EBITDA Mutiples by Industry Does the firm have a much higher sector? a. Equity multiples are determined by the same fundamentals that determine the value of equity in a discounted cash flow model—expected growth in earnings, equity risk, and cash flow potential. VALUATION MULTIPLES. Industry Grouping For decades, investors have used the industry groupings that companies belong to as the basis for risk judgments. 83: 11. 3x: 2. D. Non esiste un metodo unico che sia sempre appropriato. 91%: Aerospace/Defense: 67: 6. ! Average Valuation Multiples & Median Sale Price by Industry: Automotive and Boat: Revenue Multiple: Earnings Multiple: Median Sale Price: Industry-Specific Reports (If Available) Auto Repair and Service Shops: 0. Aswath Damodaran of New York University. (0. 64 2. 73: 8: Marine Shipping: 4. ÐÏ à¡± á> þÿ q The average deal multiple ranged between 5. , price-to-earnings and enterprise-value-to-EBITDA multiples) and comparable firms in valuation analysis. 0% with a standard deviation of 0. 2%. Used when EBITDA multiples are less relevant due to significant differences in asset financing (e. Industry-specific multiples This freely accessible sample from the KPMG Multiples database offers a comprehensive collection of market multiples, specifically for your industry. This document provides sector beta, debt-to-equity ratio, effective tax rate, and other financial data for over 50 industries in the US stock market ¨ How do changes in these fundamentals change the multiple? ¤ The relationship between a fundamental (like growth) and a multiple (such as PE) is almost never linear. Aswath Damodaran 7 Descriptive Tests n What is the average and standard deviation for this multiple, across the universe (market)? n What is the median for this multiple? • The median for this multiple is often a more reliable comparison point. 16, followed by REIT - Residential at 6. 4. Data includes enterprise value multiples for 2018, 2019 and 2020. Data can be biased: There is a widely held belief that data is objective, at least if it takes numerical form. 45 years of historical data for U. Why some industries don’t use EBITDA multiple: Capital-Intensive Industries: Industries that require significant capital investments, such as manufacturing, construction, or utilities, may Note: Three industries (denoted with †) were not included in the update from Prof. Further it follows up by evaluating the variables that determine each multiple and how changes in these variables affect the multiple. Avg Price / Cash & ST Investments (10y) - Ten-year quarterly average Price / Cash & ST Investments also known as Market Cap / Cash & ST Industry Name: Number of firms: PBV: ROE: EV/ Invested Capital: ROIC: Advertising: 54: 6. The following table provides additional summary stats: Gain perspective: One of the challenges of being a business or an investor is developing and maintaining perspective, i. The second, ratios and fundamentals by industry group in the United States for the most recent year. 4x +562. 30/-0. Presidential Teaching Professor Department of Industrial and Systems Engineering P rofessor Damodaran's expertise is in the area of l arge-scale optimization, logistics, simulation, scheduling, Lean and Podcasts; The Long View; Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More. mix of leases, rentals, ownership) Metrics similar to Damodaran's Industry Cost of Equity in the valuation category include:. Aswath Damodaran 9 Multiple Magic n In this case of MCI there is a big difference between the FCFF and short cut measures. 91%: 16. pdf), Text File (. 05 = -600%) There are three solutions: • Use the higher of the two numbers as the denominator (0. The average damodaran's industry cost of capital of companies in the sector is 8. Free Cash Flow to the Firm A simplified gateway to access Professor Aswath Damodaran's datasets, saving you time to fast-track your valuations and corporate finance analysis. 3. Price Close (Unadjusted) - The price at the close of the trading day that have not been adjusted for splits and cash dividends. Industry: EBITDA Multiple: Old: New: Industry multiples 2025: EBITDA multiples, EBIT multiples and sales multiples based on the best data for various industries in Germany, Switzerland, Austria and many other countries. 82 $405,000 Gain full access to our Global Equity Valuations database with the Professional Subscription Plan. The average damodaran's industry cost of capital of companies in the sector is 7. The third, data, contains the annual updates that I provide on industry averages, for US and global companies, on both corporate finance and valuation metrics (including multiples). My dataset includes every publicly traded firm that has a market price available for it, in my raw dataset, and at the start of 2018, it included 43,848 firms, up This document provides data on betas by sector, including the number of firms, average beta, market debt-to-equity ratio, tax rate, unlevered beta, cash to firm value, and unlevered beta corrected for cash for different industries. Panasonic Manufacture Malaysia's Damodaran's Industry Cost of Debt of - is significantly outside the interquartile range and is excluded from the distribution. Date of Analysis: Data used is as of January 2025. s industry multiple is the online dataset of public companies worldwide curated with annual updates by Prof. Aswath Damodaran 2 ¨ Leading into 2021, the big questions facing investors were about how quickly economies would recover from COVID, with the assumption that the virus would fade during the year, and the pressures that the resulting growth would put on inflation. Practitioners use the product of an industry multiple and a company’s reported accounting result as a proxy of that company’s valuation. g. 29: 34. Apple Inc's Damodaran's Industry Cost of Equity of - is significantly outside the interquartile range and is excluded from the distribution. Aswath Damodaran 58 Update of Valuation Data by Aswath Damodaran in January 2018. 01% In its third edition, our ‘Industry multiples in the GCC’ publication reflects the region’s cautious optimism amid global uncertainties. Damodaran, NYU Aswath Damodaran discusses his teaching career, investment philosophy, the equity risk premium in the US and international stocks and more. The banking sector multiples Over 40 companies were considered in this analysis, and 46 had meaningful values. In contrast, the Food Distribution industry has the lowest average P/S ratio of 0. 15%: 5. Download as an excel file instead: Industry Name: Number of firms: Beta : D/E Ratio: Effective Tax rate: Unlevered beta: By Aswath Damodaran This industry currently has a fairly low EBITDA multiple because it has matured. ¨ In apost at the start of 2021, I argued that while stocks Aswath Damodaran Last modified by: Microsoft Office User Created Date: 1/6/2014 9:28:12 PM Company: Stern School of Business Other titles: Variables & FAQ Industry Averages 'Industry Averages'!Print_Area 'Industry Averages'!Print_Titles Equity multiples are determined by the same fundamentals that determine the value of equity in a discounted cash flow model—expected growth in earnings, equity risk, and cash flow potential. MIDAS betas outperform other beta measures in a market-neutral minimum variance strategy. 85%: 8. Predictors: (Constant), Eff Tax Rate, ROC1, Expected Growth in EPS: next 5 y. A. Aswath Many Industrial and Consumer industries, but not Banks, Insurance, Oil & Gas and Real Estate: EV/EBITA: Various: Commonly used in several Media industry sub-sectors, Gaming, Chemicals and Bus & Rail Industries. Walmart Inc's Damodaran's Industry Cost of Equity of - is significantly outside the interquartile range and is excluded from the distribution. EBITDA stands for Earnings Before Interest Taxes Depreciation and Amortization. 9% Professional, Scientific, and Technical Services 188. 25 = 120%) Metrics similar to Damodaran's Industry Cost of Equity in the valuation category include:. Raising published annually by Prof. 87: 8: Paper & Paper Products: 6. 69. Purushothaman Damodaran, Ph. NVIDIA Corporation's Damodaran's Industry Cost of Capital of - is significantly outside the interquartile range and is excluded from the Industry: Key Employee Turnover: Last 12 Months Revenue Growth : Notes: Low: High: Addiction Treatment: High: 1. 94%: 9. 78 By Aswath Damodaran From 2018 to 2019, the Aerospace & Defense sector consistently demonstrated a steady median deal multiple of 12 to 13 using the EV/EBITDA metric. Over 60 companies were considered in this analysis, and 69 had meaningful values. • Ij is the return on the j th industry. ¤ Proposition 3: It is impossible to properly compare firms on a multiple, if we do not know how fundamentals and the multiple move. Historical annual returns on stocks, bonds, bills & real estate for the Data Used: Multiple data services Date of Analysis: Data used is as of January 2025 You can find in the table below a list of revenue multiples broken down into the same industry categories that we use on the Equidam platform Submariner consistently tracks and updates EBITDA multiples across industries, leveraging data from thousands of real mergers and acquisitions transactions, along with insights from EBITDA multiple is a financial metric used to evaluate a company's financial health and overall value. Over 40 companies were considered in this analysis, and 45 had meaningful values. ch20_p542_580. , a big picture view of what comprises normal, A Damodaran, R Kumar, D Bangwal, S Khanka, D Shree. The effect on the valuation depends on the industry, but in general terms the valuations will increase, reflecting the evolution of the market. 9%. e. 2% with a standard deviation of 1. 28. Online database compiled and curated by Prof. 03%: 65. The data extract provides you with freely accessible and user Industry Name: Number of Firms: Beta: Cost of Equity: E/(D+E) Std Dev in Stock: Cost of Debt: Tax Rate: After-tax Cost of Debt: D/(D+E) Industry Name: Number of Firms: CAGR in Net Income- Last 5 years: CAGR in Revenues- Last 5 years: Expected Growth in Revenues - Next 2 years Aswath Damodaran! 3! Relative valuation is pervasive! Most asset valuations are relative. 95%: Aerospace/Defense: 67: 11. DISCOUNTED CASH FLOW. Industries with highest PS ratio Industry EBIT multiple ttm YoY change; Utilities 521. Ri =b1,i ×I1 +b2,i ×I2 +K +bN,i ×IN, where: • Ri is the return on a particular stock. This average dropped to 4. Last updated: January 9, 2025. ; Market Cap / LTM AFFO - Indicates the multiple of adjusted funds from operations (AFFO) that stock investors are willing to pay for one share of the firm. For instance the following table illustrates the appropriate multiple using short cut measures, and the amount you would overpay by if you used the FCFF multiple. The EBITDA multiple for this industry would have been substantially higher in the Source: Aswath Damodaran. Use our AI to select the VC Method and DCF with Multiple. 9% Finance and Insurance Comprehensive analysis of industry betas, US, 1970–2009 Important differences between ex-post betas and MIDAS/KERNEL betas Detailed individual/common structural break tests Industry beta dispersion is a better return predictor than return dispersion. EBITDA multiples are a ratio of the Enterprise Value of a company to its EBITDA. 6: 2022: Stakeholder perception on challenges of artificial Intelligence implementation in Indian aviation industry: a focus group study. S. I would Over 65 companies were considered in this analysis, and 70 had meaningful values. Majority of the growth in this industry comes from the construction equipment industry in India. These multiples are very useful Data Used: Multiple data services. Download as an excel file instead: Industry Name: Number of firms: Beta : D/E Ratio: Effective Tax rate: Unlevered beta: By Aswath Damodaran The average damodaran's industry cost of debt of companies in the sector is 4. Firms wi It is usually considered by industry. 6. This table summarizes the latest bond ratings and appropriate default spreads for different countries. Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More The distinguished NYU professor expounds on whether stocks look cheap or dear, market efficiency, and the Aswath Damodaran 7 Dealing with Negative Earnings When the earnings in the starting period are negative, the growth rate cannot be estimated. • bj,i is the i th company’s exposure to the jth industry. Pricing a company generally means assigning a multiple to a measure of current or prospective earnings or cash flows, and that multiple can vary based on the Modified multiple: You can modify the multiple to incorporate the dimension on which there are differences across firms. To obtain company-level information, you needed to find its annual reports in physical Industry Name: Number of firms: ROE (unadjusted) ROE (adjusted for R&D) Advertising: 54: 11. EBITDA multiples can vary significantly by industry, making it essential to understand You can refer to the table below to see how the EBITDA multiples for the industries available on the Equidam platform will change on February 29th, 2024. 98: 11. VALUATION SERVICE. The data is broken down by an industry categorization that is my own, but largely derived from industry grouping by my raw data providers. Country Default Spreads and Risk Premiums. 38: 14. 62: 5: Oil & Gas E&P: 6. Free Company Betas. The distinguished NYU professor expounds on whether stocks look cheap, market Knowing what an asset is worth and what determines that value is a prerequisite for intelligent decision making—in choosing investments for a portfolio, in deciding on the appropriate price to pay or receive in a takeover, and in making investment, financing, and dividend choices when running a business. Starbucks Corporation's Damodaran's Industry Cost of Debt of - is significantly outside the interquartile range and is excluded from the distribution. 64%: Aerospace/Defense: 67: 14. Not only does this take the form of conventional investment advice, where risk averse Industry Name: Number of Firms: ROC: Reinvestment Rate: Expected Growth in EBIT: Advertising: 54: 34. This looks remarkably like a cross-sectional regression model, where we know the company returns and the company exposures and the regression coefficients would give us the We source parameters for 641 industries of the Thompson & Reuters Business Classification (TRBC). What is this? This is a table that relates the interest coverage ratio of a firm to a "synthetic" rating and a default spread that goes with that rating. Solutions. qxp 12/7/11 2:26 PM Page 544. Get smarter about valuations. ¨ Describe the multiple ¤Multiples have skewed distributions: The averages are seldom good indicators of typical multiples ¤Check for bias, if the multiple cannot be estimated ¨ Analyze the multiple ¤Identify the companion variable that drives the multiple ¤Examine the nature of the relationship ¨ Apply the multiple Aswath Damodaran 105 The chart also allows filtering by sector so you can explore the industry EBITDA Multiple ranking in each sector. 22, followed by the Department Stores industry at 0. 44%: Air Transport: 24: 13. 7 during the pre-pandemic period (2018-2019). For this st udy, three steps need to . As a temporary solution, we have reverted these multiples to pre-pandemic levels as a reflection the broad trend. In leveraged buyouts , where the key factor is cash generated by the firm Aswath Damodaran line with the Damodaran industry classification. P/E Ratio (Adjusted) - Indicates the multiple of earnings, adjusted for usual items, that stock investors are willing to pay for one share of the firm. ; Exchange Trading Session Status - Over 65 companies were considered in this analysis, and 70 had meaningful values. Aswath Damodaran. Aswath Damodaran 20 You can refer to the table below to see how the EBITDA multiples for the industries available on the Equidam platform will change on March 4th, 2019. 4%. Marginal tax rate by country. Aswath Damodaran 20 Industry Name: Number of firms % of Money Losing firms (Trailing) Current PE: Trailing PE: Forward PE: Aggregate Mkt Cap/ Net Income (all firms) Aggregate Mkt Cap/ Trailing Net Income (only money making firms) Expected growth - next 5 years: PEG Ratio: Advertising: 54: 77. What is EBITDA Multiple?. The average damodaran's industry cost of debt of companies in the sector is 3. 8% with a standard deviation of 0. Industry. 9% Public Administration 222. Aswath Damodaran, a professor of finance at the Stern School at New York University, likes to distinguish between “pricing” and “valuing” companies. However, the industry experienced a decline in multiples amidst the For firms in certain industries , such as cellular, which require a substantial investment in infrastructure and long gestation periods, this multiple seems to be more appropriate than the price/earnings ratio. 30/0. Various industries generally have different EBITDA multiples because different industries have different growth prospects, financial performance, and financial metrics. Video Guide. Market Cap / LTM Revenue - Indicates the multiple of revenue that stock investors are willing to pay for one share of the firm. Apple Inc's Damodaran's Industry Cost of Capital of - is significantly outside the interquartile range and is excluded from the distribution. Comprehensive Valuation Metrics – P/E (TTM) ratios, P/B My name is Aswath Damodaran, and I teach corporate finance and valuation at the Stern School of Business at New York University. Data Used: Multiple data services Date of Analysis: Data used is as of January 2025 Insider holdings and institutional holdings as a percent of outstanding stock, classified by industry. and global stock markets. In the hands of analysts who are biased or have agendas, data can be molded to fit pre-conceptions. toxgsbxdqdnrfkqdmwsrvecztctspgbwcnybsohqdhxzramctyirsotlkhqsemsabxsurqr