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Sum-of-the-Parts (SOTP) Valuation Calculator
Value a conglomerate the way an activist would — each segment on its own multiple, summed into an enterprise value, bridged to an implied share price. Model up to 10 segments with EV/EBITDA, EV/Revenue, P/E, or asset-value methods and see the hidden value a blended multiple obscures.
Business Segments
Enter a name and revenue for at least one segment to see the valuation.
How to Use This Calculator
Enter each segment
Add a row per reportable business line. Enter revenue and either EBITDA or an EBITDA margin (toggle the % button). Choose the valuation method that fits the segment's industry.
Bridge to equity
Enter net debt (or net cash as a negative number) and shares outstanding. The tool subtracts net debt from total enterprise value and divides by shares to get an implied price per share.
Read the waterfall
The stacked bar shows each segment's contribution to enterprise value. The breakdown table flags any segment trading well above or below the blended multiple — the classic hidden-value setup.
SOTP vs DCF vs Comparable Company Analysis
| Method | Best for | What it answers |
|---|---|---|
| Sum-of-the-Parts | Conglomerates & holding companies with unrelated segments | What is each piece worth if valued and sold separately? |
| DCF | Single-business companies with predictable cash flows | What is the business worth on its own projected cash flows? |
| Comparable Company Analysis | Companies with clean public peers | Is this stock cheap or expensive versus its peer group? |
The three are complements, not rivals. For a single-business company, run a DCF. To pressure-test your segment multiples, pull comps with the EV/EBITDA calculator and comparable company analysis, and use the P/E calculator for earnings-based segments. Learn the full method in the SOTP valuation guide.
Frequently Asked Questions
What is a sum-of-the-parts valuation?
SOTP values each business segment independently using the most appropriate multiple, then sums the results. It's the standard approach for conglomerates, holding companies, and diversified businesses where a single blended multiple is misleading.
When should I use SOTP instead of DCF?
Use SOTP when the company operates in multiple unrelated industries (e.g., Alphabet's Search, Cloud, and Other Bets), when segments would command different multiples if spun off, or when the sum-of-assets logic better captures value than discounted cash flows.
What valuation multiple should I use per segment?
Match the multiple to the segment's industry. High-growth SaaS → EV/Revenue (8–15×). Mature industrials → EV/EBITDA (6–10×). Financial services → P/E or P/B. Capital-light businesses → EV/EBITDA. Use public comps from the same sector as your reference.
What is net debt in an SOTP model?
Net debt = total debt − cash and equivalents. It bridges from enterprise value (what the whole business is worth) to equity value (what shareholders own). Enter a negative number if the company has net cash.
Why do segments trade at a premium or discount to the blended multiple?
Market perception of growth, margins, risk, and capital intensity differs by segment. A high-multiple cloud business inside a low-multiple conglomerate is “hidden” — the blended multiple undervalues it. Activists and spin-off advocates use this gap as the thesis.