Which industries place a low importance on comps?

New industries which do not have many comparable companies would place a lower importance on comps. These industries could include many up-and-coming tech companies who are first movers in their sectors and may not have any similar competitors. It would be more appropriate to use a DCF in this case. Many of these companies do not have positive earnings or EBITDA, which also means there are fewer applicable multiples to compare.

An example of an industry like this would include the ridesharing industry. Uber and Lyft are the only 2 global ridesharing companies that are publically traded, so it is difficult to create comps with only 2 companies. Also, they do not earn positive earnings or EBITDA, which significantly limits the usefulness of comparables analysis.