An exit multiple is a stock valuation ratio (such as EV/EBITDA or EV/FCF) applied to a financial metric in the final forecast year to estimate the terminal value in a DCF model.
If the final year FCF is $15M and the selected exit multiple is 15x, the terminal value is $225M. The multiple is typically derived from comparable companies or industry averages.
Exit multiples provide a market-based cross-check on terminal value in stock valuation. They are especially useful when comparable transaction data is available and when perpetuity growth assumptions feel unreliable.
MiniValuator offers the exit multiple method as an alternative to perpetuity growth for terminal value calculation in stock valuation, allowing users to compare both approaches.
¿Listo para aplicar este concepto? Prueba la Calculadora DCF de MiniValuator — calcula el valor intrínseco de cualquier acción estadounidense en menos de 60 segundos.
