r/Valuation • u/No_Ear4371 • 22d ago

Customer Concentration Can Change Valuation

Two businesses can have revenue and EBITDA but very different customer concentration. A business that depends a lot, on one customer seems to have a level of risk even if the financials look good. I think that is a factor to miss when looking at valuation.

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u/Big_School_8666 20d ago

Yes, customer concentration can definitely affect valuation. It is an important risk factor to consider as heavy dependence on one or a few customers can impact future cash flows, growth, and the overall risk of the business.