LTM vs. NTM: Why Growth Makes the Two Multiples Diverge

"LTM vs. NTM" comes up any time an interviewer pushes past the basic comps question and asks which multiple you'd actually use to price a company. It's a natural follow-up to enterprise value vs. equity value, since once you know which multiples measure the whole business versus just the equity, the next question is which time period those multiples should be measured over: what the company has already reported, or what it's expected to report next. Get this one wrong and it signals you've memorized the EV/EBITDA formula without understanding what actually goes into it.

What LTM and NTM Actually Measure

LTM stands for Last Twelve Months, also called trailing twelve months, or TTM. It's built entirely from a company's actual reported results, its most recent four quarters, with no projection involved.

NTM stands for Next Twelve Months. It's a forward-looking figure built from consensus analyst estimates for a public company, or management's own projections for a private one, covering the twelve months starting today rather than the twelve months that already happened.

Pair either period with EBITDA, revenue, or any other operating metric and you get a trailing or forward multiple: EV/LTM EBITDA versus EV/NTM EBITDA, EV/LTM Revenue versus EV/NTM Revenue, and so on. Whichever period you use, the EBITDA figure itself still needs the same add-back discipline as any other EBITDA number. Messy adjustments in the base year corrupt LTM and NTM the same way, so read up on what counts as a legitimate EBITDA add-back before trusting either multiple too far.

How to Calculate LTM From Annual and Quarterly Filings

Companies only report full financials annually and quarterly, not on a rolling twelve-month basis, so LTM has to be built rather than pulled directly from a filing. The formula:

LTM EBITDA = Most Recent Fiscal Year EBITDA + Year-to-Date EBITDA (current year) − Year-to-Date EBITDA (same interim period, prior year)

You're taking the last full fiscal year as a base, adding what the company has earned so far in the current year, and subtracting the same stretch of time from the prior year so it isn't double-counted.

A Worked Example

Say a company's fiscal year matches the calendar year, and it reported EBITDA of $240M for full-year 2025. Through the first half of 2026, it's reported $130M of EBITDA, compared to $115M over the same first half of 2025.

LTM EBITDA, as of June 30, 2026: $240M + $130M − $115M = $255M.

Now build NTM. Analyst consensus has the company earning $265M of EBITDA for full-year 2026 and $290M for full-year 2027. Since NTM here covers July 2026 through June 2027, blend the two estimates: half of the remaining 2026 figure and half of the 2027 figure.

NTM EBITDA: (50% × $265M) + (50% × $290M) = $277.5M.

The company trades at an enterprise value of $2.75B. Its two multiples come out like this:

EV/LTM EBITDA: $2.75B ÷ $255M = 10.8x EV/NTM EBITDA: $2.75B ÷ $277.5M = 9.9x

Same company, same enterprise value, two different multiples, because the denominator changed. That gap is exactly what interviewers are testing when they ask this question: can you explain why it exists, not just that it exists.

Why the Two Multiples Diverge

The gap between EV/LTM and EV/NTM comes entirely from growth. If a company's EBITDA is expected to grow, NTM EBITDA is a bigger number than LTM EBITDA, so EV/NTM comes out lower than EV/LTM for the exact same enterprise value. A company whose earnings are shrinking shows the opposite pattern: EV/NTM ends up higher than EV/LTM, because the forward number is smaller than the trailing one.

This is why comparing two companies purely on EV/LTM EBITDA can be misleading when they're growing at different rates. A slow-growing company and a fast-growing company can show the exact same EV/LTM multiple while trading at very different EV/NTM multiples, and the NTM number is usually the one that better reflects what the market is actually paying for. Building NTM off analyst consensus is really the same instinct as the growth assumptions inside a discounted cash flow: pricing a company on what it's expected to do next, not just what it already did, just condensed into a single forward twelve months instead of a multi-year build.

When Bankers Actually Use Each One

In public company comps, NTM multiples are standard whenever reliable analyst coverage exists, because they capture the growth the market is pricing in and let you compare companies on a more like-for-like basis. LTM still gets shown alongside it, partly as a sanity check and partly because it's harder to argue with a number that's already been reported.

Precedent transactions work differently. Deals get priced off LTM almost by default, because the projections available for a private target usually come from the target's own management, baked into the price the buyer already agreed to pay, not an independent analyst estimate. Using a biased forward number to build a "market" multiple defeats the purpose of a precedent transaction analysis.

Company maturity matters too. A stable, low-growth business shows a small gap between its LTM and NTM multiples, so the choice barely matters. A high-growth company shows a large gap, and picking the wrong one can make it look far more, or far less, expensive than it actually is.

Common Follow-Up Questions

"Which is higher for a fast-growing company, EV/LTM or EV/NTM?" EV/LTM EBITDA. The trailing EBITDA number is smaller than the forward one for a growing company, and a smaller denominator against the same enterprise value produces a higher multiple.

"What is calendarization and when do you need it?" Calendarization adjusts a company's reported or projected figures onto a standard calendar-year basis so it can be compared against comps with different fiscal year-ends. A company with a June 30 fiscal year-end reports its "full year" on a different clock than a comp reporting on a calendar year, so before you can compare their multiples directly, you have to re-weight each company's quarters onto the same twelve-month window, the same blending approach used to build NTM in the worked example above.

"Can you calculate NTM for a private company with no analyst coverage?" Only by using management's own projections, and those numbers deserve more scrutiny than consensus estimates, since management has an obvious incentive to present optimistic numbers. Many bankers default back to LTM when an independent forward estimate isn't available.

"Does this apply to revenue multiples too?" Yes. The same logic applies to EV/Revenue or any other multiple built off a metric that's expected to grow or shrink. The mechanics are identical: a bigger or smaller denominator against the same enterprise value.

Getting Comfortable With the Distinction

The fastest way to sound sloppy on this question is to define LTM and NTM correctly, then freeze when asked which one you'd actually use for a specific company. Practice picking a side and defending it. A mature industrial growing at 2% a year calls for a different answer than a software company growing 40% a year, and being able to explain why, on the spot, is what separates a memorized definition from real understanding.