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Nvidia
Estimated Fair Value$204.81
Current Price$229.28
Valuation Gap-10.7%
Historical Median EV/Sales16.16x
Current EV/Sales18.11x
Enterprise Value-to-Sales (EV/Sales)
For informational and educational purposes only • Not investment advice.
Compare EV/Sales valuations across companies
Apple
Estimated Fair Value$209.44
Current Price$336.64
Valuation Gap-37.8%
Historical Median EV/Sales6.64x
Current EV/Sales10.64x
Alphabet
Estimated Fair Value$213.41
Current Price$351.66
Valuation Gap-39.3%
Historical Median EV/Sales5.51x
Current EV/Sales9.27x
Microsoft
Estimated Fair Value$436.12
Current Price$535.07
Valuation Gap-18.5%
Historical Median EV/Sales9.70x
Current EV/Sales11.92x
Selected EV/Sales Multiple
What is Enterprise Value-to-Sales (EV/Sales) Valuation?
Enterprise Value-to-Sales (EV/Sales) Valuation estimates a company's Fair Value based on its Revenue and the EV/Sales multiple applied to that Revenue.
The EV/Sales ratio compares a company's Enterprise Value with its Revenue. Unlike Price-to-Sales, it considers both equity value and net debt or net cash.
Historical EV/Sales ratios show the valuation multiples at which the company's operating business has traded in the past. They can be used as a reference for estimating Fair Enterprise Value from current revenue.
EV/Sales Valuation can be useful for companies with negative or volatile earnings, but it does not directly account for profitability, margins or operating efficiency.
How the EV/Sales Model Works
The EV/Sales model estimates fair value by calculating the company's historical EV/Sales multiples, selecting a valuation EV/Sales multiple, applying it to current revenue, and converting Enterprise Value into equity value per share.
Historical
Revenue & EV Data
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Calculate Historical
EV/Sales
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Select
Valuation EV/Sales
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Estimate Fair
Enterprise Value
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Fair Value
per Share
EV/Sales Formula
Key Model Assumptions
• The company must have positive current Revenue.
• Current Revenue is based on trailing twelve-month (TTM) revenue when four consecutive quarterly periods are available; otherwise, the latest annual revenue is used.
• Historical EV/Sales ratios require valid Revenue, market value and balance sheet data.
• The 10 most recent valid historical EV/Sales ratios are used to estimate the company's typical valuation multiple.
• The historical median EV/Sales forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median EV/Sales.
• Historical EV/Sales multiples may not remain representative if the company's growth, margins, capital structure or profitability changes materially.
• Current Revenue is based on trailing twelve-month (TTM) revenue when four consecutive quarterly periods are available; otherwise, the latest annual revenue is used.
• Historical EV/Sales ratios require valid Revenue, market value and balance sheet data.
• The 10 most recent valid historical EV/Sales ratios are used to estimate the company's typical valuation multiple.
• The historical median EV/Sales forms the Base valuation assumption.
• Conservative and optimistic scenarios adjust the historical median EV/Sales.
• Historical EV/Sales multiples may not remain representative if the company's growth, margins, capital structure or profitability changes materially.
Step 1 — Calculate Historical EV/Sales Ratios
Historical Enterprise Value = Historical Market Cap + Historical Net Debt
Historical EV/Sales = Historical Enterprise Value / Historical Revenue
Historical Median EV/Sales = Median of the 10 most recent valid historical EV/Sales ratios
Historical EV/Sales = Historical Enterprise Value / Historical Revenue
Historical Median EV/Sales = Median of the 10 most recent valid historical EV/Sales ratios
The model calculates historical Enterprise Value and historical EV/Sales ratios. The median of the 10 most recent valid EV/Sales ratios is then used as the company's historical valuation benchmark.
Step 2 — Select the Valuation Multiple
Selected EV/Sales = Historical Median EV/Sales × Scenario Adjustment
The selected scenario adjusts the historical median EV/Sales to determine the valuation multiple used to estimate Fair Value.
Step 3 — Estimate Fair Value per Share
Fair Enterprise Value = Current Revenue × Selected EV/Sales
Fair Equity Value = Fair Enterprise Value − Net Debt
Fair Value per Share = Fair Equity Value / Shares Outstanding
Fair Equity Value = Fair Enterprise Value − Net Debt
Fair Value per Share = Fair Equity Value / Shares Outstanding
The selected EV/Sales multiple is applied to current revenue to estimate Fair Enterprise Value. Net Debt is then subtracted, or Net Cash is added, to determine Fair Equity Value. The resulting equity value is divided by Shares Outstanding to estimate Fair Value per Share.
Step 4 — Compare With the Current Market Valuation
Current Enterprise Value = Current Market Cap + Current Net Debt
Current EV/Sales = Current Enterprise Value / Current Revenue
Valuation Gap = Fair Value per Share / Current Price − 1
Current EV/Sales = Current Enterprise Value / Current Revenue
Valuation Gap = Fair Value per Share / Current Price − 1
Current EV/Sales shows the multiple currently assigned to the company's Revenue, while the Valuation Gap compares the estimated Fair Value with the current stock price.