Definition

EV/EBIT compares a company's enterprise value to its EBIT (Earnings Before Interest & Taxes). Unlike EV/EBITDA, it accounts for depreciation and amortization, making it stricter and better suited for capital-intensive businesses. A low multiple may indicate undervaluation, while a high multiple reflects growth premium or asset-light businesses. The ideal range varies by sector — energy and industrials typically trade at 8–12×, while tech and healthcare can trade at 15–25×.