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What is the right EV/Revenue multiple?

This is a question often asked, and is a difficult one to answer. To help visualise the relationship between Enterprise Value (EV), Revenue (ACMR) and the commonly used multiple, EV/Revenue we have created the following charts comparing online companies.

NB: ACMR = Annualised Committed Monthly Revenue, which is the most recent monthly revenues annualised.

Understanding the charts:

Along with each company’s position on the chart representing EV/Revenue multiple in relation to Revenue, the size of the bubble represents the company’s overall EV.

Chart 1 – Low to Mid range ACMR companies

Chart 1

Chart 2 – High ACMR companies

Chart 2

 

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