What is NTM EV/EBITDA? - Definition from Divestopedia (2024)

FAQs

What is NTM EV revenue? ›

EV/Revenue Formula

Enterprise Value (EV): The total valuation of the firm's operating assets and liabilities. Revenue: The annual sales of a company, which is most commonly expressed on a last twelve months (LTM) or next twelve months (NTM) basis.

Next-Twelve Months (NTM) Multiples Definition

Multiples denoted as NTM means the selected metric is based on the projected performance in the coming twelve months. Therefore, a NTM multiple is considered a “forward multiple”, since the valuation is based on a forecast, rather than actual historical financial results.

Financial analysts use Last Twelve Months (LTM) or Next Twelve Months (NTM) and a number of different valuation multiples when evaluating corporate deals.

The enterprise value to earnings before interest, taxes, depreciation, and amortization ratio (EV/EBITDA) compares the value of a company—debt included—to the company's cash earnings less non-cash expenses.

In this case, a financial analyst will have to move further up the income statement to either gross profit or all the way up to revenue. If EBITDA is negative, then having a negative EV/EBITDA multiple is not useful.

In Excel, EV = NPV(r, array of FCFs for years 1 through n) + TV/(1+r)ⁿ. Always calculate the EV for a range of terminal multiples and perpetuity growth rates to illustrate the sensitivity of the DCF analysis to these critical inputs.

It is calculated by dividing its enterprise value (Current Market Cap + Debt + Minority Interest + preferred shares – cash) by EBITDA (earnings before interest, taxes, depreciation, and amortization).

The NTM multiple refers to the multiple that would be applied to the next twelve months of a particular financial measure such as revenue, EBITDA or net income.

How Do You Calculate Enterprise Value? Take the number of outstanding shares from a company's balance sheet and multiply it by the current share market price. Then, subtract the value of cash and cash equivalents (also found on the balance sheet), and you have its EV.

What Is Enterprise Value (EV)? As its name implies, enterprise value (EV) is the total value of a company, defined in terms of its financing. It includes both the current share price (market capitalization) and the cost to pay off debt (net debt, or debt minus cash).

Does NTM mean nothing much? ›

"Not Too Much or Nothing Much" is the most common definition for NTM on Snapchat, WhatsApp, Facebook, Twitter, Instagram, and TikTok.

The enterprise value-to-revenue (EV/R) multiple helps compare a company's revenues to its enterprise value. The lower the better, in that, a lower EV/R multiple signals a company is undervalued. Generally used as a valuation multiple, the EV/R is often used during acquisitions.

Generally, the lower the EV-to-EBITDA ratio, the more attractive the company may be as a potential investment. A low EV-to-EBITDA ratio could signal that a stock is potentially undervalued.

One advantage of the EV/EBITDA ratio is that it strips out debt costs, taxes, depreciation, and amortization, thereby providing a clearer picture of the company's financial performance.

EV/EBITDA takes a more holistic picture of the company and covers the equity and the debt components of the capital structure. P/E ratio works well for manufacturing companies and companies where the business model is matured. EV/EBITDA works better in case of service companies and where the gestation is too long.

Usually, a low EV/EBITDA ratio could mean that a stock is potentially undervalued while a high EV/EBITDA will mean a stock is possibly over-priced. In other words, the lower the EV/EBITDA, the more attractive the stock is. Generally, EV/EBITDA of less than 10 is considered healthy.

Simply put, a negative enterprise value means that a company has more cash than it would need to pay off any debt and buy back all its stocks in one go, if it really wanted to.

Conversely, a low EV/EBIT ratio indicates that a company's stock is undervalued. It means that share prices are lower than what is an accurate representation of the company's actual worth. When the market finally attaches a more appropriate value to the business, share prices and the company's bottom line should climb.

EBITDA is no longer meaningful because interest is a critical component of both revenue and expenses. The balance sheet drives everything; you don't start by projecting unit sales and prices, but rather by projecting loans (interest-earning) and deposits (interest-bearing).

Investors mainly use a company's enterprise multiple to determine whether a company is undervalued or overvalued. A low ratio relative to peers or historical averages indicates that a company might be undervalued and a high ratio indicates that the company might be overvalued.

What does it mean when enterprise value is more than market cap? ›

A higher EV to Market Capitalization ratio is generally not preferred. It means that the firm has an Enterprise value greater than the Market capitalization, or in other words, that the company high levels of debt and preference shares. Such firms are deemed risky.

The EV/EBITDA ratio compares a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization. This metric is widely used as a valuation tool; it compares the company's value, including debt and liabilities, to true cash earnings.

MAC is one of a large group of nontuberculous mycobacteria (NTM), and the most common cause of NTM lung disease in the U.S. MAC organisms are common in soil and water and are easily inhaled during daily activities. Most of the time they cause no harm, but they can cause infection in groups with certain risk factors.

Among the NTM, there are three species that predominantly involve the skin: M. leprae, M. ulcerans and M. marinum.

NTM are widely distributed environmental opportunistic pathogens which can cause significant morbidity and mortality especially in patient with underlying pulmonary conditions. In our cohort MAC species were the most frequently isolated, but M. abscessus and M.

To Determine the Enterprise Value and EBITDA: Enterprise Value = (market capitalization + value of debt + minority interest + preferred shares) – (cash and cash equivalents) EBITDA = Earnings Before Tax + Interest + Depreciation + Amortization.

Key Takeaways

Market capitalization is the sum total of all the outstanding shares of a company. Enterprise value takes into account the debt that the company has taken on. Enterprise value, therefore, can identify strengths or weaknesses that market cap cannot.

An EV is a shortened acronym for an electric vehicle. EVs are vehicles that are either partially or fully powered on electric power. Electric vehicles have low running costs as they have less moving parts for maintaining and also very environmentally friendly as they use little or no fossil fuels (petrol or diesel).

An electric vehicle, such as an electric car, uses one or more electric motors powered by a battery pack to accelerate and drive.

What Does Purchase Price Mean? The purchase price represents the total enterprise value (EV) of a company including the value of its equity and debt.

Is EV same as valuation? ›

Enterprise value and equity value may both be used in the valuation or sale of a business, but each offers a slightly different view. The calculation for equity value adds enterprise value to redundant assets and then subtracts the debt net of cash available.

The NTM (Next Twelve Months) is the next twelve months from the current date. Financial measures such as the net income, EBITDA, or revenue of the next twelve months predicted are the NTM.

NTM disease is not contagious. More than 86,000 people are likely living with NTM lung disease in the U.S. Rates appear to be increasing, especially among women and older age groups. Some common symptoms of NTM lung disease are chronic cough, fatigue, weight loss, fever and night sweats.

In some people, however, NTM infects the airways and lung tissue and causes an infection. Without treatment, many people will develop a progressive lung infection. Cough, shortness of breath, fatigue, and often weight loss are symptoms.

EV-to-Revenue multiples are typically considered healthy when between 1x and 3x. If this ratio is higher, then it's considered that the stocks are over-valued, and it's not profitable for investors to invest in the company. Investors are most likely to not get any returns from this investment.

A lower EV/sales multiple indicates that a company is a more attractive investment as it may be relatively undervalued. This measurement is considered more accurate than the related price-to-sales because EV/sales takes into account a company's debt load.

What is a good Enterprise Value to Revenue Multiple benchmark? In general, a good EV/R Multiple is between 1x and 3x. However, public SaaS companies range between 6X and 12X EV/R.

The Equity Value can be higher or lower than the Enterprise Value, as this will be determined by whether the right hand side of the formula is positive or negative.

The enterprise value-to-revenue (EV/R) multiple helps compare a company's revenues to its enterprise value. The lower the better, in that, a lower EV/R multiple signals a company is undervalued. Generally used as a valuation multiple, the EV/R is often used during acquisitions.

It is calculated by dividing its enterprise value (Current Market Cap + Debt + Minority Interest + preferred shares – cash) by EBITDA (earnings before interest, taxes, depreciation, and amortization).

What does EV revenue indicate? ›

Enterprise value-to-sales (EV/Sales) is a financial ratio that measures a company's total value (in enterprise value terms) to its total sales revenue. It is further simplified as the EV per a dollar of sales. It means that the higher the ratio, the more “expensive” or valuable the company is and vice versa.

What is a good Enterprise Value to Revenue Multiple benchmark? In general, a good EV/R Multiple is between 1x and 3x. However, public SaaS companies range between 6X and 12X EV/R.

One advantage of the EV/EBITDA ratio is that it strips out debt costs, taxes, depreciation, and amortization, thereby providing a clearer picture of the company's financial performance.

Investors and analysts use the EBIT/EV multiple to understand how earnings yield translates into a company's value. The higher the EBIT/EV multiple, the better for the investor as this indicates the company has low debt levels and higher amounts of cash.

To Determine the Enterprise Value and EBITDA: Enterprise Value = (market capitalization + value of debt + minority interest + preferred shares) – (cash and cash equivalents) EBITDA = Earnings Before Tax + Interest + Depreciation + Amortization.

The thumb rule is that a company with lower EV/EBITDA is more attractive. The condition is that the debt should not be high-cost debt and the equity must be fairly valued in the market. Also the EBITDA margins should be predictable. The P/E ratio has to be linked to growth rate.

Simply put, the enterprise value is the entire value of the business, without giving consideration to its capital structure, and equity value is the total value of a business that is attributable to the shareholders.

Suppose you compare the enterprise values of two companies in the same industry. If Company A has a much higher EV than Company B, that means the estimated purchase price of Company A is higher than Company B.

The enterprise value-to-revenue (EV/R) ratio measures a company's ability to produce revenue. In contrast, the enterprise value-to-EBITDA (EV/EBITDA) ratio measures a company's ability to generate operating cash flows. EV/EBITDA considers operating expenses, whereas EV/R only considers the top line.