MultiplesAswath Damodaran / Liu, Nissim & Thomas (2002)#PeerComparison#RelativeValuation#PE#EV_EBITDA

Relative Multiples (P/E, P/B, EV/EBITDA, P/S) Calculator

Computes market-implied fair equity value by applying peer group valuation multiples (P/E, P/B, EV/EBITDA, P/S) to company financial metrics.

Calculator Inputs

Multiple Metric

Target Company EPS(USD)

Peer Median P/E(x)

Current Market Price (Optional)(USD)

Find inputs with free data (Finviz)

Find the values below on the Finviz quote page and enter them in the calculator.

Open Finviz quote page

Calculator input	Where on Finviz
Target EPS	Snapshot > EPS (ttm)
Target BVPS	Snapshot > Book/sh
SPS	Income Statement > Total Revenue ÷ Shares
Peer multiples	Finviz Screener/Groups industry averages
Current price	Snapshot table > Price

Income Statement tab — ④ Total Revenue ⑤ Shares Outstanding (for SPS)

Financial statement figures are under the Income Statement / Balance Sheet / Cash Flow tabs above the snapshot table; set Timeframe to Annual. Click an image to enlarge.

Theoretical Foundation & Equation

Relative valuation determines the value of an asset by looking at how the market prices similar assets. Multiples are standardized financial ratios that allow quick peer-group benchmarking.

Core Intrinsic Formula

Fair Value = Target Multiple × Financial Metric (EPS, BVPS, SPS, or (EV/EBITDA × EBITDA - Net Debt) / Shares)

Variable Definitions & Disclosure Guidance

Symbol	Variable Name	Description	Filing Source Guide
P/E	Price-to-Earnings	Stock price divided by earnings per share	Peer group median P/E multiple
P/B	Price-to-Book	Stock price divided by book value per share	Peer group median P/B multiple
EV/EBITDA	Enterprise Value to EBITDA	Capital-structure neutral operating cash multiple	Peer group median EV/EBITDA
P/S	Price-to-Sales	Stock price divided by revenue per share	Peer group median P/S multiple

Financial Intuition: Provides immediate market feedback on whether a company is priced at a discount or premium relative to industry peers.

Step-by-Step Worked Example

Peer Multiples Benchmark Case

Standard relative benchmarking against industry peers.

Sample Financial Filing Inputs

Target EPS

$4.00

TTM Normalized EPS

Peer Median P/E

15.0x

Industry Median

Target EBITDA / Net Debt

$20.0M / $40.0M

Financial Statements

Calculation Steps

Step 1: P/E Based Fair Value$60.00

$4.00 × 15.0x = $60.00

Step 2: EV/EBITDA Based Equity Value (10M Shares)$12.00 per share

($20.0M × 8.0x - $40.0M) / 10M shares = $120.0M / 10M = $12.00

Example Conclusion & Interpretation

P/E multiple implies $60.00 fair price with a ±15% range of $51.00 - $69.00.

Suitability Checklist & Limitations

Best Suited For

•Companies operating in mature industries with abundant listed comparables
•Rapid sanity check against market trading conditions

Not Suitable For

•Unique monopoly businesses with zero direct peers
•During widespread market bubbles or deep market dislocations

Frequently Asked Questions

Intrinsic models (DCF, S-RIM) price a stock based on its future cash flows and balance sheet equity, while relative models price a stock based on how the market prices other companies.

Primary Citations & Source Documentation

Aswath Damodaran / Liu, Nissim & Thomas (2002)

Equity Valuation Using Multiples (Journal of Accounting Research, 2002)

View Source / Filing Reference

Legal Caveat

Always use median peer multiples rather than simple averages to minimize distortion from outliers.