The valuation multiples for cosmetic industry in 2024 increased to 1.3x revenue multiple and 13.2x EBITDA multiple compared to 2023.

This is in line with the growth of the beauty industry in 2024 according to Vogue Business.

One source of growth was due to platforms like TikTok Shop and Amazon, which played a significant role in beauty product sales.

EBITDA Multiples Cosmetics

The EBITDA multiples for cosmetics companies in 2024 is 13.2x. The median EBITDA multiple increased from 2023, which was 8.4x.

The growth in the cosmetic industry explains the higher EBITDA multiples as investors attribute a higher premium on the  valuation of cosmetic companies.

One factor for higher EBITDA multiples in 2024 is increased profitability of cosmetic companies.

Cosmetic Company Margins

The median gross margin for cosmetic companies increased significantly from 47% in 2023 to 57% in 2024. One reason may be increased direct to consumer sales on social media platforms, which allows for companies to charge the higher retail price cutting out the middle.

The higher gross margin translated to EBITDA margins with a median EBITDA margin of 11% in 2024, which increased from 9% in 2023.

And the median net profit margin in 2024 is 7% compared to 3% in 2023.

Price Revenue Multiple for Cosmetics

Out of 141 cosmetic companies, the median price / revenue multiple for cosmetics in 2024 is 1.3x. Revenue multiple also rose compared to 2023, which was 0.9x.

The market sees continued growth forecast and has priced cosmetic companies at higher multiples in 2024 than in 2023.

Refresher: Value a company using revenue, value a company using EBITDA.

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