Module II· Trading ComparablesIntermediate
Question
How do you handle EBITDA timeframes for comps (LTM, NTM, FY+1, FY+2)?
Answer
Mechanics — four EBITDA timeframes for comps
- LTM (last twelve months): trailing EBITDA from the most recently reported quarters. Robust, but backwards-looking.
- NTM (next twelve months): consensus forecast for the coming 12 months, drawn from equity research (Bloomberg, Refinitiv).
- FY+1, FY+2: consensus for the next and the following fiscal year.
IB standard
NTM as the primary multiple, LTM as a sanity check. For growth companies add FY+2 — the forward multiple shows the valuation relative to future profitability.
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Common pitfall
Consensus estimates are often stale when a company has recently changed its guidance — check Bloomberg values manually against the latest earnings update before the pitch.