Valuation: Comps & Precedents
Name two situations where EV/EBITDA breaks down and you'd use EV/Revenue (or another multiple) instead.
Model answer
(1) The company has negative or near-zero EBITDA - common for early-stage / high-growth tech or biotech - so an EBITDA multiple is meaningless or distorted; EV/Revenue (or EV/Gross Profit) is used…
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