How do you adjust multiples after a market dislocation (e.g. COVID 2020, the tech crash 2022)?

In acute market dislocations, spot multiples are not representative — sentiment dominates over fundamentals. Adjustments:

• Use pre-crisis multiples (e.g. a 6-month average before the dislocation).
• Wait for post-recovery multiples (3−6 months after stabilization).
• Combined approach: 'normalized multiple' = median(LTM, 1Y avg, 3Y avg). Example COVID April 2020: equities traded at multiples 30−50% below normal levels — if a PE sponsor wanted to buy at that time, a pre-crisis multiple would be more realistic than spot.