What is the meaning of multiples based on comparable data？

Multiples based on comparable data refer to the use of valuation ratios such as price-to-earnings (P/E) or price-to-sales (P/S) ratios of similar companies in the same industry or sector to determine the value of a company. This approach assumes that companies with similar characteristics and financial performance should have similar valuation ratios. By comparing a company's valuation ratios to those of its peers, investors can assess whether the company is undervalued or overvalued relative to its industry or sector.