EV/Revenue History Chart

How to Read EV/Revenue History

EV/Revenue (also called EV/Sales) compares a company's enterprise value — market cap plus net debt — to its annual revenue. It is the multiple that works when earnings are negative, thin, or not yet the right measure of business health. Early-stage growth companies, cyclical businesses at a trough, and asset-light software names are all commonly valued on EV/Revenue.

A stock's current EV/Revenue tells you today's implied multiple. Its 10-year history tells you whether the market is paying a premium or a discount relative to what it has historically demanded for the same business. The color-coded zones use the sector median as the anchor: bars below 70% of the sector median are green (cheap); within 30% on either side are blue (fair); above 130% are red (expensive).

EV/Revenue has one important caveat: a low multiple only means cheap if the business has a path to meaningful margins. A retailer at 0.3× EV/Revenue is not cheap if it earns 1% net margin and has rising competition. Always pair EV/Revenue context with a margin check via the gross margin history chart or a full model via the DCF calculator.

The sector median line is the most useful anchor. Technology and software typically trade at 5–10× EV/Revenue on durable moats; energy and retail at 0.5–2× reflecting thin margins and capital intensity. A stock trading far above its sector median without a corresponding moat is a risk signal. One trading far below may be either a value opportunity or a value trap — the margin trend resolves which.