TMT (Tech, Media & Telecom)
Why are semiconductor companies valued on P/E or EV/EBIT rather than revenue multiples, and what is the through-cycle adjustment?
Model answer
Semis are (mostly) mature, profitable, capital-intensive businesses, so earnings-based multiples are both available and necessary: EV/EBIT beats EV/EBITDA here because depreciation is a real,…
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