There is no universal valuation premium for technology stocks over media stocks. The answer changes with the companies included, the market and date, the valuation measure, and each business’s growth, profitability, risk and debt. Dated examples illustrate why: Australian FY2026 estimates show a wide gap between software and media subsectors, while U.S. media-related industries themselves range substantially in valuation.
Start by defining “media” and “technology”
Neither label identifies a single, standardized group of companies. Media can mean advertising, broadcasting, cable, publishing, streaming or content platforms. Technology can include software, IT services, hardware and semiconductors. Classification systems reflect index rules and business activity, not a universal investment definition. For example, S&P places media and entertainment in Communication Services alongside telecom, while its Technology sector covers software, IT services, hardware and semiconductors. S&P Dow Jones Indices’ sector descriptions explain this distinction.
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That matters because a comparison between a broadcaster and a software company may say as much about their business models and peer groups as it does about broad sector labels. Define the companies or subsectors first; otherwise, the apparent “media-versus-tech” gap can shift simply because the group boundaries changed.
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What the dated valuation examples show
The following figures are useful illustrations, not a timeless rule. The U.S. figures are industry aggregates published by Aswath Damodaran at NYU Stern for January 2026. The Australian figures come from an InterFinancial TMT update dated 28 January 2026 and use FactSet estimates; most forward multiples use FY2026. These sources cover different geographies, samples and methodologies, so their figures should not be combined into one ranking.
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| Market and source | Category | P/E | EV/EBITDA | EV/Sales |
|---|---|---|---|---|
| U.S., Damodaran, January 2026 | Advertising | Forward P/E: 52.87 | All firms: 15.12 | Not stated |
| U.S., Damodaran, January 2026 | Broadcasting | Forward P/E: 17.50 | All firms: 7.66; positive-EBITDA firms only: 7.85 | Not stated |
| Australia, InterFinancial, 28 January 2026; mostly FY2026 estimates | Digital & Traditional Media | 10.2x | 7.7x | 1.3x |
| Australia, InterFinancial, 28 January 2026; mostly FY2026 estimates | Software (SaaS/Licence) | 195.8x | 23.3x | 10.7x |
The U.S. P/E figures are forward measures, but the loss-making share reported alongside them is based on trailing earnings: 78.85% of Advertising firms and 70.83% of Broadcasting firms were trailing money-losers. That denominator context makes the headline P/Es harder to interpret as straightforward price signals. Damodaran’s tables distinguish all-firm EV/EBITDA from the positive-EBITDA-only measure; for Broadcasting, those are 7.66 and 7.85, respectively. See the January 2026 U.S. P/E-by-sector data and January 2026 U.S. enterprise-value multiples.
In the Australian sample, the reported software P/E of 195.8x is notably high relative to its EV/EBITDA and EV/Sales figures. It warrants scrutiny of the earnings denominator and the sample rather than a simple conclusion that software is “worth” that much more. The underlying update is InterFinancial’s Australian Technology, Media & Telecom industry update.
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Why technology stocks may trade at higher multiples
A multiple reflects both the market price and the financial measure used as its denominator. A higher multiple can reflect expectations for future performance or a business’s fundamentals; it is not, by itself, proof that a stock is overvalued or that an entire sector deserves a premium.
- Growth expectations: Investors may accept a higher price relative to current earnings or EBITDA when they expect stronger future growth.
- Profitability and revenue durability: Margins, recurring revenue and the ability to sustain earnings can affect how investors value a business. These characteristics vary by company and are not exclusive to either sector.
- Risk and required return: Greater uncertainty or a higher required return can weigh on a valuation; perceived lower risk can support a higher one.
- Leverage and capital structure: Debt affects equity earnings and the risk borne by shareholders. Enterprise-value measures can help when comparing companies with different capital structures, but they do not erase all differences.
- Cyclicality and investment needs: Advertising demand, content spending, monetization uncertainty and other company-specific factors can influence earnings and the multiple investors are willing to pay.
CFA Institute’s 2026 guidance on market-based valuation identifies growth and required return as P/E drivers, and growth, profitability and weighted average cost of capital as EV/EBITDA drivers. Those are factors to examine company by company, not reasons to assume every technology company should command more than every media company.
Choose a multiple that fits the comparison
Each measure answers a different question. Price-to-earnings (P/E) compares a company’s equity price with its earnings per share. Trailing P/E uses recent earnings; forward P/E uses expected earnings. Enterprise value-to-EBITDA (EV/EBITDA) compares enterprise value with earnings before interest, taxes, depreciation and amortization. It can reduce distortions from different capital structures, but EBITDA is not cash flow. EV/Sales compares enterprise value with revenue, so it needs profitability and margin context.
- Use P/E when earnings are positive and reasonably representative. Treat it cautiously when earnings are small, unusually high or negative.
- Consider EV/EBITDA when debt and capital structure differ, while recognizing that EBITDA omits important costs and is not cash available to shareholders.
- Use EV/Sales with care when earnings are not yet a useful basis for comparison; pair it with margins and a credible path to profitability rather than treating revenue as value on its own.
No single multiple settles a cross-sector valuation question. CFA Institute’s framework emphasizes selecting relevant comparable companies and interpreting multiples in light of fundamentals, rather than mechanically ranking the largest or smallest ratios.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical checklist for comparing two stocks
- Define the peer group. Compare companies with similar business models and revenue mixes, not just similar sector labels.
- Align the measurement basis. Compare forward with forward or trailing with trailing, and note the date, fiscal period, currency, geography and accounting basis.
- Check the denominator. Identify loss-makers and unusually low or high earnings; confirm whether figures include all firms or only profitable firms.
- Compare fundamentals. Assess expected growth, margins, leverage, cyclicality, risk and earnings quality alongside the multiple.
- Understand the statistic. Confirm whether a reported figure is an aggregate, mean or median; do not call it a median unless the source does.
- Add historical context. A company’s or industry’s own past valuation range can help frame the comparison, but it is not a stand-alone buy-or-sell conclusion.
The sound conclusion is usually narrower than “tech is more expensive than media”: a specified company or peer group trades at a particular multiple, on a stated date and basis, relative to businesses with comparable fundamentals. The January 2026 figures show that broad labels conceal meaningful variation, especially when earnings denominators and sample definitions differ.
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