EV / EBITDA: what it is and how to read it
It compares what the whole company is worth, debt included, with what its business generates before interest, taxes, depreciation and amortization. Many professionals prefer it because it does not depend on how the company is financed.
How it is calculated
EV / EBITDA = (market cap + net debt) / annual EBITDA.
How to read it
The lower, the cheaper relative to the business. It lets you compare companies with a lot and with little debt, something the P/E does not do well. Between 6 and 12 is common in many industries; growth companies tend to be higher.
EV / EBITDA in the MeridIAn ranking
Among the 1,537 companies in the ranking with data, the median EV / EBITDA is 12.8: half are below and half above. The lowest 25% are below 9.0 and the highest 25% above 18.6.
For example: NVIDIA, 27.5; Apple, 29.7; Alphabet, 24.0; Inditex, 16.8.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 9.9 | 137 |
| Communication Services | 9.4 | 94 |
| Consumer Cyclical | 11.4 | 214 |
| Consumer Defensive | 11.1 | 124 |
| Energy | 8.1 | 95 |
| Healthcare | 14.3 | 175 |
| Industrials | 14.3 | 375 |
| Technology | 18.9 | 232 |
| Utilities | 12.3 | 91 |
Lowest EV / EBITDA
What to watch out for
It does not work for banks or insurers (debt is their raw material), and EBITDA ignores what the company must invest to keep its business going: a capital-hungry company can look cheaper than it is.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.