FREE TOOL · NO ACCOUNT NEEDED · LIVE DATA
EV/Revenue Calculator
Calculate the EV/Revenue ratio for any stock with live market data. Compare against sector benchmarks to see if a growth stock trades at a fair premium — or an unjustified one.
Ticker Lookup
EV/Revenue formula
EV ÷ Annual Revenue
Enterprise Value = Market Cap + Total Debt − Total Cash. Revenue is trailing twelve months. A lower EV/Revenue means the market charges less per dollar of sales.
When to use EV/Revenue
- Pre-profit or negative-EBITDA companies (EV/EBITDA is meaningless)
- High-growth SaaS where earnings reinvestment masks true margins
- Cross-sector M&A screening where EBITDA margins vary widely
For profitable companies, pair this with the EV/EBITDA Calculator — for pre-profit names, EV/Revenue is often the only meaningful multiple.
Results
No data yet
Enter a ticker above and click Load to calculate EV/Revenue with live financial data.
When to Use EV/Revenue
Pre-profit and negative-EBITDA companies
EV/EBITDA is useless when EBITDA is negative, and P/E is meaningless when there are no earnings. EV/Revenue is often the only meaningful multiple for early-stage software, biotech, and high-growth businesses that are reinvesting all margin into expansion. It anchors valuation to the top line — the one metric that persists even before a company turns profitable.
Pair EV/Revenue with gross margin and revenue growth rate: a business with 80% gross margins growing 40% annually can justify a much higher multiple than one with 30% margins growing 10%.
Cross-sector M&A screening
When comparing acquisition targets across sectors where EBITDA margins vary widely, EV/Revenue provides a consistent baseline. Investment bankers routinely quote EV/Revenue in deal memos because it works universally — the numerator (enterprise value) captures the full acquisition cost including debt, and the denominator (revenue) is the most stable financial line item.
Use the Comparable Company Analysis tool to run multiple peers on EV/Revenue simultaneously.
SaaS and software benchmarking
Software companies with recurring revenue and high gross margins are traditionally valued on EV/Revenue — the "SaaS multiple." During the 2020–2021 bull market, top-tier SaaS traded at 20–40× EV/Revenue. Post-rate-rise normalization brought most back to 5–12×. Technology sector median is approximately 5.2× (2024–2025), though individual companies vary widely based on growth rate and net retention.
Limitations to know
EV/Revenue ignores profitability entirely — a company losing $0.50 per dollar of revenue and one earning $0.30 can trade at the same multiple. High EV/Revenue multiples are only justified by strong gross margins, durable growth, and eventual path to profitability. Always check gross margin alongside EV/Revenue: a 2× EV/Revenue for a 20%-margin business may be expensive, while the same multiple for a 75%-margin SaaS business may be cheap.
EV/Revenue vs P/S vs EV/EBITDA — When to Use Each
Enterprise-value based
Best for cross-company comparisons. Includes debt in the numerator so capital structure doesn't distort comparisons. Works when earnings are negative. Essential for M&A and pre-profit companies.
Equity-only version
Uses market cap instead of enterprise value — ignores debt. Useful for a quick screen but misleading when comparing companies with different leverage. EV/Revenue is almost always preferable for serious analysis.
Profitability-aware
Better for profitable companies — captures operating cash generation. Breaks down when EBITDA is negative. Use for mature, cash-generating businesses and complement with EV/Revenue for the full picture.
Use them together
For pre-profit: EV/Revenue is primary, P/S is a quick sanity check. For profitable names: lead with EV/EBITDA, use EV/Revenue to verify it isn't a margin-distorted outlier. Consistent signals across multiples build conviction.
EV/Revenue by Sector — 2024–2025 Benchmarks
| Sector | Median EV/Revenue | Typical Range |
|---|---|---|
| Technology | 5.2× | 2–15× |
| Healthcare | 3.8× | 1.5–10× |
| Communication Services | 3.0× | 1–8× |
| Real Estate | 4.5× | 2–10× |
| Financial Services | 2.1× | 1–5× |
| Industrials | 1.6× | 0.8–4× |
| Consumer Discretionary | 1.4× | 0.5–4× |
| Utilities | 1.8× | 1–4× |
| Basic Materials | 1.3× | 0.5–3× |
| Energy | 1.2× | 0.5–3× |
| Consumer Staples | 1.1× | 0.5–3× |
How to Interpret EV/Revenue Multiples
Below 1× — distress or value
The market prices the entire business below one year of revenue. Could signal financial distress, declining revenue trajectory, or a cyclically depressed sector — but occasionally a deep value opportunity for turnaround investors. Check the debt load before concluding it is cheap.
1–3× — normal for most industries
Most industrial, energy, consumer, and financial companies trade in this range. The market pays 1–3 years of revenue — consistent with mid-single-digit operating margins and modest growth. This is the comfort zone for value-oriented investors.
3–8× — growth premium
The market expects above-average revenue growth, high gross margins, or both. Technology and healthcare often occupy this range. A 5× multiple on a 30%-growth software company with 75% gross margins can be reasonable; the same multiple on a 5%-growth company with 30% margins is almost certainly overvalued.
Above 8× — high expectations required
Requires sustained multi-year revenue CAGR and a clear path to high margins to justify. Common in hyper-growth SaaS and AI infrastructure. At these multiples, any deceleration in growth or miss on margin expansion can cause the multiple to compress rapidly and painfully.
Frequently asked questions
What is the EV/Revenue ratio?
The EV/Revenue ratio (also called EV/Sales) divides a company's enterprise value by its trailing twelve month revenue. Enterprise value = market cap + total debt − total cash. A ratio of 5× means investors are paying $5 for every $1 of annual sales. Unlike P/E or EV/EBITDA, EV/Revenue works even when a company has no earnings or negative EBITDA, making it the go-to multiple for high-growth and pre-profit companies.
What is a good EV/Revenue ratio?
There is no universal 'good' EV/Revenue — it depends entirely on the sector and growth rate. Technology companies with high margins often trade at 3–10×; energy and consumer staples companies typically trade below 2×. As a rough guide: below 1× can indicate distress or a cyclically depressed business; 1–3× is normal for most industries; 3–8× reflects a growth premium; above 8× requires sustained multi-year revenue CAGR to justify. Always compare against the sector median.
How is EV/Revenue different from P/S ratio?
P/S (price-to-sales) uses market cap, while EV/Revenue uses enterprise value (market cap + debt − cash). EV/Revenue is more accurate for comparing companies with different capital structures. A company with $2B market cap and $3B debt has a very different enterprise value than one with $5B market cap and no debt, even if their P/S ratios look similar. EV/Revenue is the preferred multiple for M&A analysis and cross-company comparisons.
When should I use EV/Revenue instead of EV/EBITDA?
Use EV/Revenue when EV/EBITDA is not meaningful — specifically for pre-profit or negative-EBITDA companies, early-stage growth businesses, and high-growth SaaS where earnings reinvestment masks true margins. EV/Revenue is also useful when comparing companies in the same sector that have widely different EBITDA margins. For profitable companies, EV/EBITDA is usually more informative because it captures operating cash generation.
Why does a high EV/Revenue not necessarily mean overvalued?
A high EV/Revenue reflects market expectations for future margin expansion and revenue growth. A software company growing revenue 40% annually with improving gross margins may fairly trade at 8–12× EV/Revenue because investors are pricing future profitability — not just current revenue. The key question is whether the implied growth and margin trajectory can be delivered. If revenue growth decelerates, a high EV/Revenue multiple compresses quickly.
What does it mean when EV/Revenue is below 1?
An EV/Revenue below 1× means the market is pricing the entire business at less than one year of revenue. This can indicate financial distress, declining revenue, a cyclically depressed sector, or a turnaround situation. In rare cases, it signals a deep value opportunity. For comparison: brick-and-mortar retailers and commodity producers sometimes trade near 0.3–0.7× in down cycles. It is not automatically cheap — check why the market assigns such a low multiple.
More tools & guides
FINISHED THE NUMBERS?
A calculator gives you one number. The report gives you the argument.
Assumptions, scenarios, and what breaks them — on any public company.
See a sample report →