Online company valuation feedback

by a searcher from Northwestern University - Kellogg School of Management

3 years ago

I am evaluating a company that has the following numbers: 

###-###-#### Revenue $5.6M, EBITDA: $500K
2019: Revenue: $6.6M EBITDA $550K
2020: Revenue $11.1M EBITDA $2.1M
2021 Forecast: Revenue $13M and EBITDA $2.8M

Its a company in the online curriculum space that likely got a major "covid boost" with kids studying at home.  Typical multiples in the curriculum space are 5-6x. 

Lenders: How would you go about providing leverage for the company? Searchers: Would you value the company off of 2020 or take an average off of the last three years? 

1 like
170 views
7 comments

searcher from University of California, Berkeley - Haas School of Business

I agree with Mike. I wouldn’t just take the average, but I would make a top line adjustment to revenue based on your best estimate of what the COVID effect was. That should give you a better estimate of the long term potential of the business

3 years ago | like reply | 0 likes

searcher from University of Illinois at Urbana-Champaign

This is where the market research portion of DD comes in. Is this a COVID blip or is this trend going to continue upwards? Its most likely both

3 years ago | like reply | 0 likes

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