Pricing vs Valuing Companies - The EV/EBITDA Multiple
Episode description
What is the difference between the price and value of a SaaS company? How do metrics such as Enterprise Value to EBITDA multiples play a role in this discussion? Dave "CAC" Kellogg and Ray "Growth Rike discuss the topic on this episode of SaaS Talk with the Metrics Brother and cover a wide array of topics including:
- What is a SaaS company worth?
- What is the definition of "price vs value" in the stock market
- Examining Valuation Multiples What They Miss, Why They Differ, and the Link to Fundamentals
- How Cash and Debt impacts Enterprise Value
- EV/EBITDA vs EV/FCF vs EV/Revenue Multiples
An inspiration for this episode was from a paper written by Michael Mauboussin with the title: "Examining Valuation Multiples What They Miss, Why They Differ, and the Link to Fundamentals". You can read the paper by clicking here.
If you are a SaaS professional or even just interested in learning more about how SaaS companies are valued, this conversation is full of interesting insights and details on the concept of SaaS company valuations.
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