What a Comps Table Is
A comparable company analysis (comps) is the primary valuation method used in SaaS M&A, IPO pricing, and private fundraising benchmarks. The core logic: a company is worth a multiple of a key financial metric (typically NTM revenue), and the market-implied multiple is observable from publicly traded peers. Apply the median multiple to your company's NTM revenue → implied enterprise value.
Comps outputs are almost always presented as a range (e.g., P25–P75 of the peer group) rather than a single number, because the peer group itself is never perfectly comparable. The range brackets the defensible territory for negotiation or pricing.
Step 1: Define the Peer Group
Peer selection is the most consequential — and most biased — step in comps analysis. Bankers presenting to a sell-side client will include peers that inflate the implied multiple. Acquirers presenting to a board will include peers that deflate it. The discipline is applying objective criteria before looking at the resulting multiples:
- Primary vertical: CRM companies comp to CRM companies, not infrastructure. Gross margins, sales motions, and NRR profiles differ materially across verticals.
- Business model: Usage-based SaaS comps differently than seat-based. Cohort expansion dynamics are different.
- Growth cohort: ±15 percentage points from the target's growth rate. A 60% grower comping against 15% growers artificially depresses the multiple.
- ARR scale: Companies within 2–3× of the target's ARR. Small companies trade at different multiples than large ones for structural reasons (liquidity premium, index inclusion).
Browse SaaSDB sectors to find relevant public peers by vertical.
Step 2: Collect the Metrics
For each peer, collect:
| Metric | Source | Why It Matters |
|---|---|---|
| Market Cap | Bloomberg / Yahoo Finance | To calculate EV |
| Net Debt (Debt − Cash) | Balance sheet | EV = Mkt Cap + Net Debt |
| NTM Revenue | Consensus estimates | Denominator for EV/NTM |
| NTM ARR Growth | Consensus or guidance | Normalization for growth |
| Gross Margin | Income statement | Quality of revenue |
| NRR | 10-Q disclosures | Revenue durability signal |
| FCF Margin | Cash flow statement | Rule of 40 second leg |
For reading financial disclosures, see the How to Read a 10-K guide.
Step 3: Calculate and Normalize
EV/NTM Revenue for each peer, then normalize by growth rate — the "growth-adjusted multiple" or SaaS PEG ratio:
A company at 8x EV/NTM growing 40% has a growth-adjusted multiple of 0.20x — the same as one at 4x growing 20%. This normalization makes peers with different growth rates comparable. Values below 0.15x are typically cheap relative to the peer set; above 0.30x expensive.
Live EV/Revenue Benchmarks by Sector
Step 4: Apply to the Target
Take the P25, median, and P75 of the peer group's EV/NTM Revenue multiple. Apply each to the target's NTM revenue estimate → three implied enterprise values. Subtract net debt → three implied equity values. Divide by fully diluted share count → implied price range.
In M&A, this range is presented alongside a precedent transactions analysis (acquisition multiples, which carry a control premium) and a DCF. The comps floor is typically the lowest of the three methods; precedent transactions the highest.