What are some examples of industry-specific valuation multiples?

Let me break it down simply:

Think of industry multiples like specialized measuring tools. While a ruler works for basic measurements, some jobs need laser precision tools designed for specific tasks.

Airlines live by EV/EBITDAR - the 'R' adds back aircraft rent. Why? Because some airlines buy planes while others lease them. Adding back rent makes them comparable, like comparing car prices regardless of financing method.

Real estate runs on price per square foot or cap rates. These tell you more than generic earnings multiples. Like comparing houses - price per square foot tells you more than total price alone.

SaaS companies use ARR multiples (Annual Recurring Revenue). For high-growth tech firms burning cash today, traditional profit multiples don't make sense. It's about measuring future potential.

Hotels use price per room. Telecoms use EV/subscriber. Mining companies? Price per ounce of reserves. Each industry has metrics that capture its unique value drivers.

Remember: The best multiple is the one that fits your industry's economics. Generic multiples like P/E work broadly, but industry-specific ones tell a clearer story. They capture what really drives value in each sector.

Talk soon,

Sam