EBITDA Multiples by Industry: Business Valuation Multiples and SDE Multiples by Sector
Real 2026 US numbers, split by the market your business actually sits in. Enter your own earnings and get the multiple applied to them, cross-checked against a revenue multiple and a cash flow view.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
In short
EBITDA multiples by industry vary far more by the size of the business than by its sector. Across US listed companies the average enterprise value to EBITDA multiple was 19.73x in January 2026, with semiconductors at 34.75x and auto parts at 6.43x. Private companies do not trade anywhere near that. GF Data put full-year 2025 private-equity buyouts at an average of 5.9x adjusted EBITDA between $10M and $25M of enterprise value, rising to 6.6x between $25M and $50M. Below roughly $1M of earnings, US buyers stop quoting EBITDA altogether and quote SDE instead, at a median 2.7x in Q2 2026. Find your size tier first, then your sector.
Start here
Which multiple applies to you depends on which market you are in
This is where most EBITDA multiple tables mislead people. The multiples published for listed companies describe a market almost no private owner sells into. A business doing $800,000 of profit and a business doing $80 million of profit are priced by different buyers, funded by different lenders, and quoted on different earnings bases. Find your row before you look at any sector number.
| Market tier | Earnings size | Typical multiple | Applied to | Source |
|---|---|---|---|---|
| Main Street | Under about $1M | 2.0x to 3.5x, median 2.7x | SDE | BizBuySell Insight Report, Q2 2026 |
| Lower middle market | $1M to $5M EBITDA | 5.9x at $10M to $25M of enterprise value | Adjusted EBITDA | GF Data, full-year 2025 |
| Middle market | $5M to $25M EBITDA | 6.6x rising to about 10.0x | Adjusted EBITDA | GF Data, full-year 2025 |
| Public companies | Listed, 5,994 US firms | 19.73x whole-market average | EBITDA | NYU Stern (Damodaran), January 2026 |
The gap between the top and bottom row is roughly seven times, on identical earnings. That gap is not a sector effect. It is size, liquidity, and owner dependence.
Private companies
EBITDA multiples by industry for privately held US businesses
These are the ranges US M&A advisors report for private lower middle market transactions in 2026. They are published as ranges rather than single numbers for a good reason: private deal terms are confidential, so the data behind them is thinner and noisier than public market data. Treat the range as the negotiating field, and the column on the right as what decides where in that field you land.
| Sector | Reported EBITDA multiple range | What moves you inside the range |
|---|---|---|
| Software and SaaS | 8x to 15x | Recurring revenue, net retention, gross margin |
| Healthcare services | 5x to 9x | Payor mix, provider retention, licensure |
| Manufacturing | 5x to 7x | Customer concentration, capex needs, backlog |
| HVAC and mechanical | 4x to 8x | Service contract base and commercial mix |
| Professional services | 4x to 7x | Client concentration and owner dependence |
| Home services (general) | 4x to 6x | Route density and repeat customer rate |
| Plumbing | 3x to 6x | Service agreements and geographic density |
| Landscaping | 3x to 6x | Contracted maintenance share versus one-off jobs |
Reported ranges for US lower middle market deals, 2026. Most lower middle market businesses across all sectors land between 4x and 9x. Last updated July 2026.
Size premium
Deal size moves the multiple more than sector does
GF Data tracks private-equity-sponsored transactions between $10M and $500M of enterprise value. Its full-year 2025 numbers show the size premium cleanly, because the same sectors appear in every band. A company does not become worth more per dollar of profit by changing industry. It becomes worth more per dollar of profit by getting big enough that institutional buyers and cheaper debt come into play.
| Enterprise value | Average multiple of adjusted EBITDA | What is happening in that band |
|---|---|---|
| $10M to $25M | 5.9x | Lower middle market platform buyouts |
| $25M to $50M | 6.6x | The first real size premium shows up here |
| $100M to $250M | about 10.0x | Institutional buyers, broader lender pool |
| $10M to $500M (all deals) | 7.2x | The blended average across the whole GF Data set |
Source: GF Data, private-equity-sponsored transactions, full-year 2025.
Cost of debt sets the ceiling
With the federal funds rate holding in the 4.5% to 5.5% area, a buyer funding an acquisition with debt can service less price per dollar of EBITDA than they could in 2021. Multiples across the private market reset with rates and have stayed reset.
Buyer pool widens with size
A $600,000 SDE business is bought by an individual using an SBA loan. A $4M EBITDA business is bought by a search fund or a small sponsor. A $20M EBITDA business gets a competitive auction. Each step up adds bidders, and bidders are what lift multiples.
Earnings quality is priced separately
Two businesses with identical EBITDA do not fetch identical multiples. Contracted revenue, customer diversification, and a management team that survives the sale all get paid for. So does clean, defensible accounting.
Public companies
US public company EV/EBITDA multiples by industry, January 2026
This is the dataset most industry multiple tables are quietly copied from. It covers 5,994 US listed companies and is rebuilt every January by Aswath Damodaran at NYU Stern. It is useful for reading relative sector strength: software really does earn more per dollar of profit than trucking. It is not useful as a price for a private business, and anyone quoting you 20x because software trades at 24.48x is misreading it.
| Industry | US listed firms | EV/EBITDA |
|---|---|---|
| Software (system and application) | 309 | 24.48x |
| Semiconductor | 66 | 34.75x |
| Electrical equipment | 112 | 24.59x |
| Real estate (operations and services) | 54 | 21.95x |
| Healthcare products | 204 | 19.78x |
| Entertainment | 92 | 19.41x |
| Restaurant and dining | 64 | 17.49x |
| Retail (general) | 23 | 17.38x |
| Engineering and construction | 48 | 17.18x |
| Beverage (soft) | 27 | 16.90x |
| Construction supplies | 40 | 16.82x |
| Machinery | 105 | 16.22x |
| Environmental and waste services | 53 | 15.61x |
| Drugs (pharmaceutical) | 228 | 15.25x |
| Hotel and gaming | 63 | 14.93x |
| Retail (building supply) | 14 | 14.42x |
| Business and consumer services | 155 | 14.26x |
| Computer services | 64 | 14.10x |
| Utility (general) | 14 | 13.73x |
| Household products | 110 | 13.17x |
| Transportation | 19 | 12.55x |
| Advertising | 52 | 12.00x |
| Building materials | 41 | 11.61x |
| Furniture and home furnishings | 27 | 11.27x |
| Publishing and newspapers | 19 | 11.24x |
| Healthcare support services | 104 | 11.17x |
| Trucking | 26 | 10.41x |
| Recreation | 49 | 10.39x |
| Food processing | 78 | 10.01x |
| Telecom (wireless) | 12 | 8.97x |
| Retail (grocery and food) | 15 | 8.94x |
| Homebuilding | 30 | 8.92x |
| Oilfield services and equipment | 97 | 8.63x |
| Shipbuilding and marine | 8 | 7.95x |
| Air transport | 23 | 7.58x |
| Auto parts | 35 | 6.43x |
| Total US market | 5,994 | 19.73x |
Source: NYU Stern, Enterprise Value Multiples by Sector (US), last updated January 2026. Figures cover firms with positive EBITDA. Reproduced as published.
How to use this
Turning an industry multiple into a number that means something
Normalize the earnings first
The multiple is the easy half. The number you multiply is where deals are won and lost. Add back the owner salary above what a replacement manager would cost, strip out genuinely personal expenses, and remove one-off costs that will not recur. Then stop, because every add-back past that point gets challenged. Our guide to adjusted EBITDA add-backs covers what buyers actually accept.
Pick the right earnings base
Under about $1M of earnings, US buyers quote SDE, which keeps one owner salary in the profit. Above about $2M to $3M they quote EBITDA, which assumes a hired manager. Applying an EBITDA multiple to an SDE figure inflates the answer badly. The difference is explained in SDE vs EBITDA.
Use your size tier, not the public table
Take the tier table at the top of this page, find your row, then adjust within the sector range below it. A $1.5M EBITDA manufacturer is looking at 5x to 7x, not the 16.22x that listed machinery companies trade at.
Cross-check with a second method
A multiple is one opinion. Run a revenue multiple and a discounted cash flow against the same numbers and see whether the three agree. When they diverge sharply, that divergence is the finding. That triangulation is what the EBITDA multiple estimate does automatically.
Under $1M
What US small businesses actually closed at in 2026
If your business earns less than about a million dollars, none of the EBITDA tables above describe your buyer. Your buyer is an individual or a small operator, usually funded with an SBA 7(a) loan, and they will quote you a multiple of seller discretionary earnings. BizBuySell publishes closed-transaction medians every quarter, and these are the most representative public numbers for that market.
$349,250
Median sale price
Q2 2026, 2,117 closed US transactions
2.7x
Average cash flow multiple
Applied to seller discretionary earnings
$155,921
Median cash flow
The SDE the multiple is applied to
$692,087
Median revenue
Implying a revenue multiple near 0.7x
Read those four numbers together and the arithmetic is blunt: the median US small business changing hands in Q2 2026 had about $692,000 of revenue, about $156,000 of owner earnings, and sold for about $349,000. That is the market almost every owner searching for an EBITDA multiple is actually in. For the sector-level view, see business sale multiples by industry and the reverse lookup in what multiple does my business sell for.
Questions
EBITDA multiple questions people actually ask
What is a good EBITDA multiple?
A good EBITDA multiple depends entirely on the size of the business. For a Main Street business earning under $1M, 2x to 3.5x of seller discretionary earnings is normal. For a lower middle market company with $1M to $5M of adjusted EBITDA, GF Data put 2025 averages at 5.9x for deals between $10M and $25M of enterprise value. Public US companies averaged 19.73x in January 2026. A multiple is only good relative to businesses of the same size in the same sector.
What is the average EBITDA multiple by industry?
Across all US listed companies the average enterprise value to EBITDA multiple was 19.73x in January 2026, with software at 24.48x, machinery at 16.22x, trucking at 10.41x, and auto parts at 6.43x. Private companies trade far below those numbers. Reported lower middle market ranges run from about 3x for landscaping to 15x for software with strong recurring revenue.
How many times EBITDA is a business worth?
Most privately held US businesses sell for 3x to 7x adjusted EBITDA. Under roughly $1M of earnings, buyers usually quote SDE rather than EBITDA and pay 2x to 3.5x. Between $1M and $10M of EBITDA, 5x to 8x is the common band. Above $10M of EBITDA the multiple keeps climbing because the buyer pool widens and debt gets cheaper.
Why are private company EBITDA multiples lower than public company multiples?
Three reasons, and they compound. A public share can be sold in seconds while a private company takes months to sell, which is the discount for lack of marketability. Public companies are larger and more diversified, so their earnings are more predictable. And a private company usually depends on one owner, so part of its profit walks out at closing. That gap is why a 19.73x public average tells a $2M-EBITDA owner almost nothing useful.
What industry has the highest EBITDA multiple?
Among US listed companies in January 2026, semiconductors led at 34.75x, followed by electrical equipment at 24.59x and software at 24.48x. In the private lower middle market the top of the range belongs to software and vertical SaaS, where contracted recurring revenue and high gross margins support 8x to 15x. Asset-heavy and cyclical sectors sit at the bottom in both markets.
What does a 5x EBITDA multiple mean?
It means the enterprise value equals five times one year of adjusted EBITDA. A business with $1.2M of adjusted EBITDA at 5x carries an enterprise value of $6M. That is the value of the operating business, before you subtract debt and add surplus cash to get to what the owner actually receives at closing.
Is a higher EBITDA multiple always better?
For a seller, yes, as long as the earnings figure it is applied to is defensible. A high multiple applied to an aggressively adjusted EBITDA usually collapses during the buyer quality of earnings review, and the price gets renegotiated before closing. A defensible 5x on clean earnings beats a headline 7x that does not survive diligence.
What EBITDA multiple do small businesses sell for?
Small businesses under about $1M of earnings are quoted in SDE, not EBITDA. BizBuySell recorded 2,117 closed US small business transactions in Q2 2026 at a median sale price of $349,250, a median cash flow of $155,921, and an average cash flow multiple of 2.7x. Businesses at that size sell on SDE multiples of roughly 2x to 3.5x.
Last updated July 2026
The valuation methods
Apply the multiple to your own numbers
Enter revenue, earnings, and growth. You get an estimated range from an EBITDA or SDE multiple, a revenue multiple, and a discounted cash flow, benchmarked against comparable sales, with the drivers that moved your multiple explained. An educational estimate, not a certified appraisal.