high valuation multiple

USAGE SUMMARY

The phrase "high valuation multiple" is correct and usable in written English.
It is typically used in financial contexts to describe a situation where a company's valuation is significantly high relative to its earnings or other financial metrics. Example: "Investors are often cautious when a startup is being offered at a high valuation multiple, as it may indicate inflated expectations."

✓ Grammatically correct

News & Media

Formal & Business

Science

Human-verified examples from authoritative sources

Exact Expressions

1 human-written examples

"Historically its been a low-margin company with a high valuation multiple, and that disconnect has always been the basis for my caution," he said.

Forbes

Human-verified similar examples from authoritative sources

Similar Expressions

59 human-written examples

Stephen Saroki: Prior to the election, I thought the market was substantially overvalued, especially given declining earnings coupled with historically high valuation multiples.

Forbes

But Nuance's sky-high valuation multiple is a stretch.

The New York Times

Maybe this is one of those rare buyouts where an exit could happen on a higher valuation multiple than what was paid, if the consortium can present a less risky business to the world.

The Washington Post

The evidence is that Mr. Market placed a higher valuation multiple on Berkshire's earnings five years ago than today.

Forbes

Simply stated, higher growth and lower volatility are the two factors that lead to higher earnings and a higher valuation multiples (a higher price to earnings ratio).

Forbes

For example, a recent BCG study showed that top ESG performers attained 3% to 19% higher valuation multiples than did median ESG performers.

Forbes

We found that in each sector, the top performers for combined performance for the material issues, most of which were related to downside and risk, had higher valuation multiples (when all other measures were equal) than the median performers.

Forbes

To justify Tesla's high 2016 valuation multiple, revenue would need to keep growing at a fast clip.

The New York Times

REUTERS Tesla's Stock Is Trading at Rich Multiples  |  To justify Tesla's high 2016 valuation multiple, revenue would need to keep growing at a fast clip, Antony Currie of Reuters Breakingviews writes.

The New York Times

"But we can't forget that these stocks are all trading at or near 52-week highs, with valuation multiples above historical norms, so the bar is a lot higher than it's been over the last couple of years".

Los Angeles Times

Expert writing Tips

Best practice

When using "high valuation multiple", provide context by specifying the industry and comparing it to industry averages to clearly illustrate the degree of overvaluation.

Common error

Avoid using "high valuation multiple" without providing supporting evidence or comparison. Simply stating that a company has a "high valuation multiple" is insufficient; explain which metrics (e.g. P/E ratio, price-to-sales) are elevated and why they are considered high in the specific context.

Linguistic Context

The phrase "high valuation multiple" functions as a noun phrase that describes a financial metric. It's typically used to characterize a company or asset whose market price is significantly elevated relative to its earnings, sales, or other fundamental financial measures. Ludwig AI confirms its use in financial contexts.

Expression frequency: Common

Frequent in

News & Media

58%

Formal & Business

25%

Science

17%

Less common in

Wiki

0%

Encyclopedias

0%

Social Media

0%

Ludwig's WRAP-UP

The phrase "high valuation multiple" is a common term in finance, used to describe assets or companies priced at a premium relative to their financial performance. Ludwig AI validates its appropriateness and grammatical correctness in financial contexts. While a "high valuation multiple" isn't inherently negative, it warrants caution and justification through metrics like P/E ratios or price-to-sales ratios. Related phrases include "premium valuation" and "inflated valuation". It's crucial to provide context when using this phrase, comparing it to industry averages to accurately portray the extent of the valuation.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

premium valuation

Focuses on the premium aspect of the valuation, highlighting that the valuation is above average.

rich valuation multiple

Emphasizes the richness or substantial nature of the valuation multiple.

inflated valuation

Directly indicates that the valuation is higher than justified by the company's fundamentals.

expensive valuation

Highlights the high cost associated with the company's valuation.

lofty valuation

Suggests the valuation is ambitious or overly optimistic.

exorbitant valuation

Indicates an extremely high and often unreasonable valuation.

elevated earnings multiple

Specifically refers to the high ratio of price to earnings.

premium market capitalization

Highlights the high market value of the company relative to its peers.

overvalued asset

Focuses on the asset being priced higher than its intrinsic value.

stretched valuation

Suggests the valuation is pushed to its limits and may not be sustainable.

FAQs

What does it mean when a company has a high valuation multiple?

A high valuation multiple indicates that investors are paying a premium for the company's earnings or revenues, reflecting high expectations for future growth or profitability. It can also suggest the company is "overvalued".

How is a "high valuation multiple" determined?

A "high valuation multiple" is determined by comparing a company's valuation multiples (e.g. P/E ratio, price-to-sales ratio) to industry averages or historical multiples. If the company's multiples are significantly higher than its peers, it may be considered to have a "high valuation".

What are some alternatives to saying "high valuation multiple"?

You can use alternatives like "premium valuation", "rich valuation multiple", or "inflated valuation" depending on the specific context and the nuance you wish to convey.

Is a "high valuation multiple" always a bad thing?

Not necessarily. A "high valuation multiple" can be justified if the company has strong growth prospects, a competitive advantage, or is operating in a rapidly expanding market. However, it also increases the risk that the company may not be able to meet investors' expectations, leading to a potential correction in the stock price. In some cases it can be considered a "premium valuation".