What does EV / sales mean?

What the whole business costs relative to its annual sales.

How do you interpret EV / sales?

A fallback valuation gauge for pre-profit or cyclical firms. Like P/S, only comparable across similar-margin businesses, but it accounts for debt and cash unlike P/S.

How does EV / sales compare across companies?

Compare within a margin cohort; the debt-and-cash adjustment makes it cleaner than P/S for leveraged firms.

Constellation Brands STZ EV / sales

EV / sales at other companies

Keurig Dr PepperKDP

2.5×-1.4×

Brown-Forman CorporationBF.A

3.6×-1.1×

PepsiCoPEP

2.7×0.0×

Monster BeverageMNST

7.4×-0.6×

Crown HoldingsCCK

1.3×+0.1×

Coca-ColaKO

7.3×-0.1×

Other financials

Income statement

See full

Revenue$1.9B-11.3%

Gross profit$951.7M-14.6%

Operating income$441.6M—

Net income$201.8M+154%

Balance sheet

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Cash & equivalents$102.4M+50.4%

Total debt$10.6B-1.0%

Total equity$8.1B+17.4%

Total assets$21.9B+1.1%

Cash flow

See full

Operating cash flow$562.8M-5.4%

CapEx$218.9M-22.5%

Free cash flow$343.9M+10.2%

Valuation

See full

Market cap$24.21B—

Enterprise value$34.72B—

P/E14.4×—

P/S2.7×—

Profitability

See full

Gross margin51.6%-0.5pp

Operating margin29.8%—

Net margin18.5%+17.7pp

FCF margin19.6%+0.6pp

Returns & leverage

See full

Return on equity22.5%+21.6pp

Debt / equity1.3×-0.2×

Current ratio1.1×+0.2×

Questions, answered.

What does EV / sales mean?: What the whole business costs relative to its annual sales.
How do you interpret EV / sales?: A fallback valuation gauge for pre-profit or cyclical firms. Like P/S, only comparable across similar-margin businesses, but it accounts for debt and cash unlike P/S.
How does EV / sales compare across companies?: Compare within a margin cohort; the debt-and-cash adjustment makes it cleaner than P/S for leveraged firms.