EV/Sales multiple
Enterprise value divided by revenue. The default multiple for fast-growing companies whose profits are not yet representative of the business.
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EV/Sales puts a company’s whole enterprise value over its revenue. A company with 40 million in revenue and a 220 million enterprise value trades on 5.5x EV/Sales. Because revenue is almost always positive and hard to distort, the multiple stays usable for young companies where earnings are negative or misleading.
The trade-off is that revenue says nothing about profitability. A business can grow quickly while losing money on every sale, so EV/Sales is best read next to a margin or efficiency check such as the unit economics and the Rule of 40. As a company matures and profits stabilise, investors shift toward EV/EBITDA.
EV/Sales is one of the two headline metrics in the market approach and the core output of the DealMatrix Multiples dataset, where it is filtered by sector, stage and region.
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DealMatrix gives you EV/Sales and EV/EBITDA multiples for private companies by sector, stage and region.