When you look up a company's EV/EBITDA multiple, you'll usually find two versions sitting side by side: an LTM (last twelve months) multiple and an NTM (next twelve months) multiple. For a stable, slow-growing business the two numbers are often close enough that the distinction barely matters. For a fast-growing company, they can diverge sharply — and mixing them up is one of the fastest ways to misread a comps screen.

What LTM and NTM Actually Measure

Both multiples use the same numerator, Enterprise Value, but divide it by a different EBITDA figure:

  • LTM EBITDA is the actual, reported EBITDA over the trailing twelve months — real, already-earned results with no forecasting risk.
  • NTM EBITDA is a forward-looking estimate (usually sell-side consensus, sometimes management guidance) for the twelve months ahead.

Because the denominator changes but Enterprise Value doesn't, a company whose EBITDA is expected to grow quickly will always show a lower NTM multiple than LTM multiple — the market is pricing the same equity value against a bigger expected earnings base.

Why the Gap Between Them Is the Real Signal

A common mistake is to look at a single multiple in isolation and label a stock "expensive" or "cheap." A company trading at 20.0x LTM EV/EBITDA looks rich next to a peer group trading at 12.0x — until you check that the same company trades at 15.0x on an NTM basis versus a peer median of 11.5x. The premium hasn't disappeared, but it has compressed from roughly 67% to about 30% (0.304) once forward growth is priced in. That gap is exactly what the market is telling you about growth expectations, and it's a working example in our case study on LTM vs. NTM Multiples, where you can work through the full calculation yourself.

When to Trust Which Multiple

Neither multiple is universally "correct" — each answers a different question:

  • LTM is the more defensible number when you want to avoid relying on a forecast that might not materialize, or when comparing companies whose forward estimates are unreliable or unavailable.
  • NTM is more useful when comparing companies with meaningfully different growth rates, or when peers report on different fiscal year-ends — a rolling forward estimate re-aligns everyone to the same twelve-month window regardless of when each company's fiscal year actually ends.

In practice, bankers and equity research analysts rarely pick just one. A well-built comps screen — like the peer selection and scrubbing process covered in our Comparable Company Analysis case — shows both bases side by side, so the reader can see how much of any premium or discount is explained by growth rather than by the market simply mispricing the stock.

How This Connects to Valuation Multiples More Broadly

If you're still building intuition for what a valuation multiple represents in the first place, our guide on what a valuation multiple actually means is a good starting point before layering LTM vs. NTM distinctions on top.