EBITDA multiples by industry

EBITDA multiple is a financial metric used to evaluate a company's financial health and overall value. EBITDA multiples can vary significantly by industry, making it essential to understand industry-specific EBITDA multiples when evaluating companies in different industries.

EBITDA multiple is calculated using two metrics: EBITDA and Enterprise value (EV). EBITDA multiples, or also known as EV/EBITDA, are calculated by dividing a company's enterprise value by its EBITDA, the formula is as follows:

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is calulated like this:

Enterprise value (EV) is sometimes also referred as the total value of the company. Enterprise value (EV) is basically a modification of market capitalisation value adjusted for the company debts and cash.

EBITDA multiples are a useful tool for comparing companies in the same industry, evaluating a company's value, and making informed investment decisions. However, investors should be aware of the limitations of EBITDA multiples and consider other important factors when evaluating a business, such as a company's management team, competitive positioning, and market trends.

EBITDA Multiples by Industries

Here is a table showing EBITDA multiples by industries in the US as of Nov 2026:

Industry	Average EBITDA Multiple	Number of companies
Advertising Agencies	15.09	24
Aerospace & Defense	16.58	67
Agricultural Inputs	7.37	11
Airlines	9.41	16
Aluminum	4.77	4
Apparel Manufacturing	11.72	15
Apparel Retail	9.11	29
Asset Management	12.85	87
Auto Parts	9.9	42
Auto & Truck Dealerships	11.33	22
Banks - Diversified	12.57	7
Banks - Regional	9.8	282
Beverages - Non-Alcoholic	16.41	12
Biotechnology	15.99	444
Broadcasting	12.36	12
Building Materials	11	13
Building Products & Equipment	14	28
Business Equipment & Supplies	9.83	4
Capital Markets	13.04	61
Chemicals	9.31	13
Coking Coal	9.32	5
Communication Equipment	20.56	44
Computer Hardware	14.75	31
Conglomerates	11.39	16
Consulting Services	11.89	16
Consumer Electronics	17.61	8
Copper	9.64	5
Credit Services	12.12	41
Diagnostics & Research	24.04	42
Discount Stores	14.25	8
Drug Manufacturers - General	22.68	14
Drug Manufacturers - Specialty & Generic	15.06	49
Education & Training Services	8.71	20
Electrical Equipment & Parts	14.88	39
Electronic Components	17.25	38
Electronic Gaming & Multimedia	13.04	14
Electronics & Computer Distribution	11.63	8
Engineering & Construction	14.84	39
Entertainment	14.44	37
Farm & Heavy Construction Machinery	12.78	20
Farm Products	10.87	14
Financial Data & Stock Exchanges	17.28	11
Food Distribution	14.06	9
Footwear & Accessories	10.95	10
Furnishings, Fixtures & Appliances	10.26	23
Gambling	9.49	8
Gold	8.46	37
Grocery Stores	9.44	9
Healthcare Plans	16.01	10
Health Information Services	14.87	37
Home Improvement Retail	11.36	6
Household & Personal Products	14.28	23
Industrial Distribution	17.57	18
Information Technology Services	12.59	47
Insurance Brokers	12.58	15
Insurance - Diversified	10.31	10
Insurance - Life	8.3	16
Insurance - Property & Casualty	8.14	38
Insurance - Reinsurance	6.86	7
Insurance - Specialty	9.59	20
Integrated Freight & Logistics	12.33	18
Internet Content & Information	16.8	45
Internet Retail	15.98	27
Leisure	12.74	26
Lodging	19	7
Luxury Goods	9.59	9
Marine Shipping	7.42	30
Medical Care Facilities	16.32	38
Medical Devices	18.38	105
Medical Distribution	22.3	5
Medical Instruments & Supplies	20.31	43
Metal Fabrication	15.44	15
Mortgage Finance	12.93	14
Oil & Gas Drilling	7.36	8
Oil & Gas E&P	6.3	61
Oil & Gas Equipment & Services	9	46
Oil & Gas Integrated	5.9	10
Oil & Gas Midstream	8.96	41
Oil & Gas Refining & Marketing	7.57	17
Other Industrial Metals & Mining	10.23	24
Other Precious Metals & Mining	11.19	13
Packaged Foods	10.35	47
Packaging & Containers	10.39	20
Personal Services	10.76	10
Pollution & Treatment Controls	15.86	14
Publishing	9.77	6
Railroads	13.96	8
Real Estate - Development	10.5	9
Real Estate Services	12.5	25
Recreational Vehicles	11.31	11
REIT - Diversified	12.92	15
REIT - Healthcare Facilities	15.75	17
REIT - Hotel & Motel	12.76	14
REIT - Industrial	16.15	16
REIT - Mortgage	13.56	37
REIT - Office	14.48	19
REIT - Residential	14.35	18
REIT - Retail	14.86	25
REIT - Specialty	19.16	18
Rental & Leasing Services	11.07	18
Residential Construction	13.78	17
Resorts & Casinos	10.39	16
Restaurants	15.34	42
Scientific & Technical Instruments	23.15	25
Security & Protection Services	12.65	16
Semiconductor Equipment & Materials	24.33	29
Semiconductors	24.63	62
Software - Application	20.44	173
Software - Infrastructure	19.58	125
Solar	11.83	17
Specialty Business Services	13.51	32
Specialty Chemicals	13.92	52
Specialty Industrial Machinery	16.12	69
Specialty Retail	10.91	33
Staffing & Employment Services	11.56	20
Steel	11.47	14
Telecom Services	9.46	33
Thermal Coal	8.36	6
Tobacco	15.77	7
Tools & Accessories	13.98	9
Travel Services	12.26	12
Trucking	11.76	15
Utilities - Diversified	11.53	9
Utilities - Independent Power Producers	11.11	6
Utilities - Regulated Electric	11.49	33
Utilities - Regulated Gas	11.15	15
Utilities - Regulated Water	13.32	12
Utilities - Renewable	11.22	15
Waste Management	13.84	14

As shown in the table, the Semiconductors industry has the highest average EBITDA multiple of 24.63x, followed by Semiconductor Equipment & Materials at 24.33x. In contrast, the Aluminum industry has the lowest average EBITDA multiple of 4.77x. These differences in EBITDA multiples highlight the importance of understanding industry-specific factors that affect a company's financial health and performance.

Industries with lowest EBITDA Multiple

Industries with the lowest EBITDA Multiple are presented in the chart and table below. The chart also allows filtering by sector so you can explore the industry EBITDA Multiple ranking in each sector.

Industry	Average EBITDA Multiple	Number of companies
Aluminum	4.77	4
Oil & Gas Integrated	5.9	10
Oil & Gas E&P	6.3	61
Insurance - Reinsurance	6.86	7
Oil & Gas Drilling	7.36	8
Agricultural Inputs	7.37	11
Marine Shipping	7.42	30
Oil & Gas Refining & Marketing	7.57	17
Insurance - Property & Casualty	8.14	38
Insurance - Life	8.3	16

Industries with highest EBITDA Multiple

Industries with the highest EBITDA Multiple are shown in the following chart and table. You can further refine the industries in the chart by sector.

Industry	Average EBITDA Multiple	Number of companies
Semiconductors	24.63	62
Semiconductor Equipment & Materials	24.33	29
Diagnostics & Research	24.04	42
Scientific & Technical Instruments	23.15	25
Drug Manufacturers - General	22.68	14
Medical Distribution	22.3	5
Communication Equipment	20.56	44
Software - Application	20.44	173
Medical Instruments & Supplies	20.31	43
Software - Infrastructure	19.58	125

Factors that Influence EBITDA Multiples

Several factors can influence EBITDA multiples, including:

• Industry-specific factors
• Market trends
• Company-specific factors
• Macro economic conditions

Understanding these factors can help investors evaluate a company's EBITDA multiples accurately and make informed investment decisions.

Why EBITDA Multiples are Different Across Industries

EBITDA multiples are different across industries because of various factors that affect the company's financial health and performance that are specific to that industry. For instance, industries with high growth potential, high margins, and low levels of competition tend to have higher EBITDA multiples. On the other hand, industries with low growth potential, low margins, and high levels of competition tend to have lower EBITDA multiples. Some of the factors that affect EBITDA multiples across industries include:

Barriers to Entry

Industries with high barriers to entry (commonly referred as business moats) tend to have high EBITDA multiples. This is because companies in these industries are perceived as protected from new competitors, which leads to higher profit margins and revenue growth rates.

Examples of industries with high barriers to entry include the healthcare, technology, airlines, telecommunications, and pharmaceutical industries. These industries have significant obstacles or costs for new entrants to establish themselves, such as extensive regulation, high capital requirements, strong intellectual property protection, and expertise required to develop and maintain innovative products or services. This makes it challenging for new companies to enter the market and compete with established players.

Capital Intensity

Industries that require significant capital expenditures tend to have low EBITDA multiples. This is because the high capital requirements lead to lower profit margins, which results in lower EBITDA multiples.

The oil and gas, manufacturing, utilities, construction, and transportation industries are examples of capital-intensive industries that require significant investments in physical assets such as machinery, equipment, and facilities. These investments can be a significant barrier to entry for new companies, as they require substantial capital and access to financing. Companies in these industries must make ongoing investments in order to remain competitive and maintain their operations.

Competition

Industries with high levels of competition tend to have lower EBITDA multiples. This is because companies in these industries face pressure to keep prices low, which results in lower profit margins and revenue growth rates.

The retail, food and beverage, hospitality, advertising and media, and transportation industries are examples of highly competitive industries with low EBITDA multiples. These industries have intense competition, resulting in lower profitability and valuations. Companies in these industries must focus on cost control, differentiation, and innovation to remain competitive and profitable. Investors tend to value companies in these industries based on factors beyond just EBITDA multiples, such as growth potential, market share, and management expertise.

Advantages and Limitations of EBITDA Multiples

EBITDA multiples have several advantages and limitations when used to asses a company value. EBITDA multiples are a popular method for valuing businesses due to their simplicity and ease of derivation from financial statements.

Advantages of EBITDA Multiples

• EBITDA multiples are straightforward and easy to calculate.
• EBITDA multiples are a useful tool for comparing companies in the same industry.
• EBITDA multiples can be useful for evaluating a company's financial health.

Using EBITDA multiples however has some limitations, such as not providing a direct value for the business and being subject to approximation based on peer metrics. Additionally, since EBITDA is not officially defined by accounting regulations, it is vulnerable to misrepresentation and carries a significant risk of error. Therefore, while EBITDA multiples offer a quick and easy way to determine value, investors must exercise caution and consider other factors when evaluating a business's true worth.

Limitations of EBITDA Multiples

• EBITDA multiples do not consider a company's capital structure.
• EBITDA multiples can be misleading if a company has high debt levels or significant non-recurring expenses.
• EBITDA multiples do not consider a company's growth potential.

When are EBITDA multiples by industry useful

EBITDA multiples are useful for evaluating stocks or making portfolio decisions when there is comparability. Meaning we are comparing very similar businesses, with similar capital structure that operate in a similar way, such as in the case of income-producing properties with uniform comparable properties. However, it becomes difficult to use EBITDA to determine value for tangible and intangible assets that lack comparability. In rare situations, EBITDA can be used by making adjustments and comparisons. In most other situations, such as comparing two technology companies with different market demographics and consumer markets, making comparisons with EBITDA can be difficult.